Margins for them are MUCH worse, that is why they missed their earning targets this quarter.

Also, count me as a person who bought a netbook that shipped with XP and immediately installed Linux on it - the company no longer offered the model I wanted with Linux. So as always Microsoft is pushing Windows on people whether they want it or not and then turning around and screaming MARKET SHARE MARKET SHARE!

MS had to substantially cut their licensing per unit in order to get onto netbooks, which is one reason they are now suffering despite this "success".

That may be bad for their bottom line, but it has no bearing on market share.

I disagree: if a company's bottom line is weak, its ability to compete is weakened and a reduction in market share is likely to follow if this continues.

Well, I'm no economist, but lowering prices isn't always a bad thing. And I definitely think it was wise for MS to adapt their pricing to the netbook market. It is definitely not in Microsoft's long-term financial to give Linux a toehold on the retail desktop market.

I think a better comment would have been:

One market Microsoft is weak and being forced out (phones), another is very low margin, and dragging down Microsoft's overall revenue and profits (netbooks).

Yes it was. MS didn't want XP to be on these machines, they wanted Vista, but the low specs of Netbooks forced them to keep XP on or concede the market to others. It's one market where other OSs - Linux, Android, OSx/iPhone (when apple launch a tablet or whatever) have a good chance. And a later, more consumer-friendly design.

Though I didn't know MS's share was over 90%. It will be interesting to see what Windows 7 brings to this.

As for windows mobile - the less said about that the better.