Most gadgets are powered by ARM chips for two reasons. They are extremely energy efficient and dirt cheap. ARM chips on average cost manufacturers less than a US dollar. These chips however lack the power and sophistication it requires to run Windows. This is the main reason why you won’t find them in your run of the mill PC.

The market is changing though. The evolution of CPU’s has reached to a point where most people don’t need the extra power offered by next generation  CPUs. This and the increasing popularity of Linux opened up a new gap in the market. Asus saw this opportunity and gave birth to the eeepc. By using cheap low powered hardware in combination with a custom Linux based operating system, they gave users a lightweight portable device that could perform tasks like browsing the web and word processing without burning a hole in their pocket.

It wasn’t long before Intel came to the market with the Atom processor that fueled netbook revolution. Microsoft was caught completely of guard. Vista was far too resource intensive to run on these devices. XP was at the end of its life and too pricey to ship with low cost netbooks. Instead in a desperate attempt to capture a slice of this emerging market they droped of the price of XP to netbook manufacturers and extended its life. Because users were more familiar with the Windows operating system the prevalence of Linux on netbooks slowly dwindled.

The evolution of netbooks have made them bigger, more powerful and also more pricey. This also made them better candidates for newer Microsoft operating systems. Can these new devices still be classified as netbooks? Their specifications and price are pretty much on par with smaller form factor notebooks. The definition of a netbook is not well defined and changes depending on who you ask. Some believe that these new netbooks no longer fit the definition.

These new Windows/Atom based netbooks seem to be leaving the original netbook market largely unserviced. This leaves the door wide open for new low cost ARM based netbooks. Over the years ARM processors have become more powerful while still maintaining low power consumption. Snapdragon processors are now powerful enough to compete with Intel in the low power computing market. Traditional Windows operating systems that people have grown far to accustomed to does not work on the ARM architecture. There is also no indication that Microsoft plans to support it.

It seems like Microsoft is again being caught of guard as Linux is set to regain its prominence in the low cost computing market. This week has seen 15 new ARM based netbooks being unveiled at Computex Taipei 2009. It is expected that 20% of netbooks sold this year will be ARM powered. With Microsoft not being able to capitalise on this market Linux  should have a field day.