Fully functional laptops under $400 are real possibilities now, and some of the most buzz-worthy use Linux, such as Asustek Computer Inc.'s EeePC and the One Laptop Per Child Foundation's $200 "XO" computer for schoolchildren. Linux also is available on slim little "netbooks" being pushed by Intel Corp.

Not only is Linux essentially free to the PC vendor, but the operating system also is better suited than Vista for cheap PCs' spartan hardware designs. (Windows XP is available on scaled-back PCs like Intel's Classmate, but it's unclear what will happen after Microsoft soon stops selling XP to the general public.)

Business computing suppliers are finding open-source desktops especially gaining traction in cost-conscious developing markets. For example, a PC distributor in Eastern Europe is packaging software from IBM Corp. and Linux vendor Red Hat Inc. to create Microsoft-free desktops for that market.

One buyer is Aleksandar Spagnut, a director of Moscow-based Rushotel, which needed new desktop PCs for a hotel-building project. Spagnut said his company saved 30 to 35 percent over comparable Windows machines. He added that Linux PCs are now common enough that a snowball effect is emerging.

Perhaps more importantly, PC makers could have greater incentive to save money by offering Linux. The price that big PC manufacturers pay Microsoft for Windows varies and is not disclosed, but is believed to commonly exceed $50 per PC.

"I'm a big believer in the inevitable forces of economics — they're like glaciers," said Mark Shuttleworth, CEO of Canonical Ltd., which this month is releasing a new version of Ubuntu, a leading version of Linux that can run PCs. "Glaciers carve out terrain. It takes time."

Linux on the desktop doesn't have to take off like crazy to really start to matter. Of the 981 million PCs in existence worldwide last year, 1.7 percent ran Linux, according to Gartner Inc. That sounds paltry. But Apple's Mac operating system accounted for just 2.5 percent, and Apple is considered a significant, influential alternative to Windows.

Linux is partly hampered by its greatest asset: its widely dispersed nature.

Linux is a core set of code called a kernel; developers build different layers of software on top of it to serve different computing purposes. (Open-source providers make money by charging for add-on services, such as technical support or security upgrades.)

As a result, Linux comes in many flavors, known as distributions, fracturing the push Linux might otherwise make.

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Summarised by the WOUGNET TechSupport team from an article by Brian Bergstein, AP Technology Writer. Find the full article here