Freescale partnered with Cannonical Ltd. to deliver the upcoming April release of its Ubuntu version of Linux for the CPU. The Open Office applications from Sun Microsystems could be used on such systems, but "we don't see these as content creation as much as content consumption devices," said Burchers.
At the Consumer Electronics Show, Freescale will demo a prototype netbook made by an ODM division of AsusTek using its CPU and an earlier release of Ubuntu.
Craig Merrigan, vice president of consumer marketing at notebook maker Lenovo, was cool on the idea of Linux-based netbooks. The company rolled out a handful of Atom-based netbooks recently, part of a relatively new push into consumer systems for the former IBM ThinkPad group.
"All the info we get from the market, especially through the retail channel, is that Linux-based machines have significant problems with returns," said Merrigan. "That's most likely to do with people expecting the same experience as with Windows, but finding it to be different and having issues printing or running iTunes or something like that," he said.
Lenovo has not ruled out Linux/ARM netbooks. Indeed, it already offers Linux as a build-to-order option for education users.
That type of configuration occurs to anyone looking at this space, but today it looks like the market is very loyal to Windows for usability," he said.
Freescale tested Linux-based netbooks with users in Chicago and Dallas.
"Their first reaction was, 'oh, it's a tiny PC,' and they had disappointment when saw it was not a Windows machine, but they got over that and figured out how to surf the Web," Burchers said.
The systems are mainly targeted at young people wanting to browse the Web and watch movies, he said. It could complement smart phones and laptops, he added, noting as many as 30 percent of netbooks shipping today are non-Windows machines.
Lenovo's Merrigan said it's not clear yet to what extent netbooks will complement or cannibalize notebook sales. He agreed the machines will mainly be used for social networking and watching Web videos.
"We've seen some people explore the lower reaches of the market with products compromised in various ways to get below $300," Merrigan said. "We expect there will be a fair amount of diversification, but they will probably have a $399 midpoint with some systems above and some below that," he said.
"We are very excited about the netbook market" overall, he added. "In the last year, everyone has gotten in and the projections for next year are for tens of millions of units despite the gloomy economic outlook."
Indeed, netbooks added $200 million to Intel's top line in its relatively strong third quarter.
In an effort to jump on the netbook bandwagon, Nvidia has renamed its 9400 integrated graphics processor as the Ion and is pitching it as a chip set for Intel's Atom CPU. The chip supports high definition video and displays larger than 10-inches diagonally, features Intel's Atom chip set lacks.
Nvidia claims the chip has ten times the graphics performance of Intel's integrated part and runs the premium version of Windows Vista, a version not supported by Intel's chip. Nvidia's chip also supports HDMI, DVI USB 2.0 and Gbit Ethernet.
The company claims Intel bundles its Atom CPU and related chip set for a single price, whether or not OEMs want to use the chip set. Intel did not respond directly to the claim. Nevertheless, Nvidia claims OEMs can still hit $350-500 prices for netbooks using its 9300 chip.
"It's an intriguing idea," said Merrigan of Lenovo, speaking of a netbook with better graphics. "Netbooks have limitations that come from trying to reach a certain price point, and higher performance at the same price is always attractive," he said.
Nvidia is also showing a Pico-IPX motherboard measuring about 10x7 centimeters using Atom and its 9300 chip. The board powers an Nvidia PC reference design measuring just 0.6 liters in volume.
"It becomes the smallest full PC platform," said David Ragones, an Nvidia product manager. "We think there's an opportunity for lots of new use cases in the home with this design," he added.