Microsoft has acknowledged Linux as a competitor to its
Windows desktop client business for the first time.
Microsoft listed Linux distributors Canonical and Red Hat among
competing commercial software suppliers in its
annual report to the US Securities and Exchange Commission.
In past years, Microsoft has named Red Hat only as a competitor
to its server and tools business, which includes the server version
of Windows.
The report said the Linux operating system had gained "some
acceptance" as PC makers look to reduce costs and more people buy
netbook PCs that
mainly run Linux.
Windows Vista has proven to be too large and too costly for
netbooks, which has driven adoption of Linux.
Microsoft's Windows 7, due for release in October ,is to have a
special light version optimised for use on netbooks.
The report also acknowledges growing competition from Apple,
Google, Mozilla and Opera as internet browsing moves away from
traditional PCs to mobile devices.
"User and usage volumes on mobile devices are increasing around
the world relative to the PC," the report said.
But Microsoft said Windows will continue to compete effectively
by delivering "innovative software" backed by the "largest support
network" for any operating system.