Dell hopes to earn goodwill with Linux PC

Dell may have won applause from customers Tuesday by announcing it will sell commercial PCs running the Ubuntu distribution of Linux, but if the experience of competitors is a guide, it faces challenges translating the move into financial success.

Dell competitors including Hewlett-Packard (HP) and Lenovo Group already sell Linux-powered PCs on some customized machines. But retail demand for the open-source OS is a fraction of the market for Microsoft's Windows, vendors say.

"HP has not yet seen strong demand for a standard, preloaded Linux PC offering in North America," said Tiffany Smith, a spokeswoman for HP's personal systems group.

HP currently uses Windows Vista as the factory-standard OS on its U.S. consumer desktops and notebooks. Retail users can easily install alternative systems, since the majority of HP commercial systems are certified to run Linux, she said.

With enough customer demand, HP will begin to install Linux as a standard setting. But so far, the company has seen that demand only in specialized niches -- HP ships Linux on certain entry-level consumer PCs in developing countries and offers it as an option for U.S. enterprise customers designing customized business desktops, notebooks, and workstations.

Likewise, Lenovo offers dozens of models that are certified to run Linux if customers choose to install it.

But the company installs Linux on only a select few products, such as the ThinkPad T60p mobile workstation it launched in August for industrial-strength applications such as computer-aided design. That PC uses the Novell Suse Linux Enterprise Desktop 10 OS and Intel's Centrino Duo notebook platform.

"Lenovo has seen some demand for Linux notebooks," said Ray Gorman, a company spokesman. "What changes is the popularity in varying distributors. We have seen desire in the market move among Red Hat, Novell Suse, TurboLinux, and some newer versions such as Ubuntu."

Even if Dell gains only a sliver of new sales, the company is likely to earn a lot of goodwill from its move, according to a market analyst.

"They're probably not going to sell billions of these things. It's not going to be 50 percent of their revenue, it's probably going to be 2 percent," said Jack Gold, principal analyst at J.Gold Associates. "But what they do get is market buzz, which is something they definitely need right now. And they show market leadership; they get the message out that 'We listen to our customers' needs.' And that is a good thing for them, given the tough time Dell's been having."

In recent quarters, Dell has slipped behind HP into second place for global PC market share, and the company remains the target of an accounting investigation by the U.S. Securities and Exchange Commission.