Despite this down economy – or maybe because of it – cheaper laptops that are optimized for Internet use, devices known as “netbooks,” have emerged as hot items in the otherwise sluggish consumer electronics industry.

 

Depending on their functionality, netbooks typically sell for less than $400 and have emerged as a bright spot in the struggling electronics industry – though companies such as Microsoft Corp. and Lenovo (News - Alert) have seen earnings dips and have been forced to lay off thousands of workers, partly because of the devices’ increasing popularity.

 

Like any hot new Internet-ready device that can be used in different ways, netbooks appear to branching out. In the past few weeks alone, industry stalwarts such as Microsoft and Verizon (News - Alert) have unveiled or announced plans to develop their own versions of netbooks (originally the invention of a Taiwanese company, which developed the first netbook less than two years ago).

 

IT giant Dell (News - Alert) is launched a new netbook just for kids, the devices are making their way into the enterprise and new e-book tablet-like functions on some netbooks are said already to present a serious challenge to Amazon’s much-hyped Kindle products.

 

About a month ago, we reported on a China-based netbook developer that’s better known for making Skype headsets – a company called SkyTone – that was demonstrating their Alpha 680 model online. At the time, it appeared that the device was the first to leverage the open source platform Android from Internet search and ad leader Google.

 

Now, Reuters (News - Alert) reporter Kelvin Soh tells us that the world’s No. 3 PC brand, Acer, is planning to sell a netbook model that runs on the Android operating system, and calls it the first to do so.

 

“Acer was the first PC vendor to officially announce that it was making Android PCs, weeks after it said it planned to launch smartphones – mobile phones packed with advanced computer-like capabilities – on the same platform later this year,” Soh reports.

 

Whoever got there first with an Android-based OS, Soh duly notes that the device could challenge Microsoft’s (News - Alert) Windows OS, especially since a computer running on Android could be cheaper than the MS product, since PC brands pay about $25 to install Windows XP into each netbook.

 

“Android could cost less as its open source nature means developers and brands are free to use it and change it to suit their own needs,” Soh reports.

 

It isn’t clear whether Microsoft faces a real challenge to its Windows OS – it would be surprising, frankly, if it did, especially considering that Android was developed for smartphones, not netbooks – but stay tuned to TMCnet for developments.