Allan Krans, an analyst with Technology Business Research Inc., put it more bluntly. "That's what got Microsoft from the 6 percent decline [in Windows unit sales] to the 15 percent to 16 percent decline in Windows revenues," said Krans. "Netbooks are a growing impact on Microsoft's bottom line."
Netbooks can't take all the blame for the drop in Windows revenues, Krans cautioned -- the larger issue is the slide in computer sales -- but they exacerbate Microsoft's problem. And it's not going to get better overnight, if ever.
"Netbooks, and lower-priced PCs in general, show a fundamental shift in buying," Krans argued. "It's not something that will go back to the way it was any time soon. The shift is away from bigger and better toward simplicity and ease-of-use." The latter, he said, was one reason that Apple continues to do relatively well, even though its Macs are premium-priced. "People want something that's easy to use, not heavy and complex," said Krans, referring to operating systems.
The launch of Windows 7, which most analysts believe will happen in the second half of this year, may not put an end to the netbook revenue problem for Microsoft. The company has said it will sell Windows 7 Starter, the lowest-priced version, to netbook makers.
"Netbooks will have a long-term impact on Microsoft," Krans warned.