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When it comes to Linux netbooks, PC manufacturers should act more like cell-phone makers and telcos by selling customized and subsidized machines with online services.

That's according to Linux Foundation executive director Jim Zemlin who believes the Linux netbook market is not realizing its full potential, because those making the machines - PC manufactures - are employing an outdated business model.

And that's giving Microsoft time to catch up to Linux, raising the prospect that the company simply replicates its domination on laptops and desktops.

"It benefits Microsoft and lets them regroup and get their act together to emulate these models," Zemlin said. He believes the Linux netbook market will get its act together - he'd just like to see it happen faster.

Zemlin will be taking the message to the Open Source in Mobile (OSiM) conference in San Francisco this week. He's expected to use the podium as a way to lobby handset providers and telcos to engage with netbook makers. UK mobile operators are already offering free laptops with wireless contracts.

Linux offers an opportunity for PC makers to deliver customized netbooks to specific markets and types of user because of the open nature of the code, unlike Windows.

However, manufacturers are simply swapping one operating system - Windows - for another - Linux - on the new netbooks, rather than creating additional value around the machines. In some ways that's good, because companies like Hewlett Packard, Dell and Asus have made sure the Linux works on their machines and it's affordable for ordinary users - ordinary users that want Linux, that is.

"While all that's great, we can do a lot better" Zemlin said.

According to Zemlin, OEMs should start working with alternative business models like those of the telcos. Operating system vendors and Linux integrators, meanwhile, should do a better job of providing crisp web APIs the OEMs can use to enable these telco-like models.

"The typical operating system game is: create operating system, go to vendor, ask them to pay X amount per device, have them ship with device," Zemlin told The Reg. "That's not the only game in town."

"No one has really figured out how to bundle a mix of services and web APIs, or have fulfillment mechanisms and set up a business relationship between operating systems makers, device makers and carriers."

"It's not their [OEMs'] traditional bread and butter: they are great at manufacturing, building a better, faster widget - but that's not the game," he said.

"Learn from Nokia - meld a kick ass, industrial design with customized software experience and have it subsidized by an alternative business model, be that subsidy or services offering, movies and entertainment - that's a better way to skin this cat."

Zemlin said that subsidizing netbooks would help seed the market and make Linux-powered machines widely available.

Google last week indicated it might subsidize Linux-powered netbooks. According to Zemlin, companies could soon make their money back during the lifetime of any contract sold along with a netbook.

"The thing Google can do on a grand scale is customize software and break business models," Zemlin said. Subsidies would mean more access to computing for more people he added. "It's great for Google, great for Linux and great for open source," he said. ®

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