As reported by Businessweek, HP is working on their own Linux-based operating system.
This doesn't come as a surprise. It's widely known that Windows Vista hasn't been exactly flying off the shelves. OEMs have counted on new releases of Windows to drive hardware sales. With the lackluster demand for Vista many OEMs are not realizing their projected sales figures. In the past, new versions of Windows were a blessing for OEMs that are tied to Microsoft. Now that blessing has become a curse.
Because Microsoft has maintained a monopoly they have been in the position to dictate terms in the PC market. Needless to say that this doesn't sit well with large OEMs.
We now know that Linux is a viable option on the desktop as witnessed by the myriad of netbooks which offer Linux with a compelling GUI as the default. We see Dell offering select systems with Ubuntu pre-installed. HP has partnered with Novell to offer the option of SLED on some systems. Acer's vice president of marketing, Gianpiero Morbello said in an interview with vnunet.com "We have shifted towards Linux because of Microsoft". As OEMs continue to explore the Linux alternatives there will inevitably be challenges.
Large OEMs exploring and shipping desktop Linux is a threat to Microsoft's profitable consumer PC monopoly. It's a safe bet that they won't stand idle and watch that monopoly slowly evaporate. After Microsoft stopped shipping XP to OEMs this past summer they were forced to backtrack a bit and continue to offer XP for 'netbooks' to compete with the various Linux offerings. Vista requires far too many resources to effectively run on this class of computer.
Steve Ballmer frequently points to Linux as infringing Microsoft's 'IP' (software patents) and implies that Linux distributors will eventually have to compensate Microsoft for it's use. As GNU/Linux starts to take a serious bite out of Microsoft's market share it is probable that they will turn to the courts. Unfortunately it is likely that many OEMs will try to enter into 'patent covenants' ala Novell under the guise of "interoperability". Will GPLv3 prevent this?
It's a very good thing that OEMs are waking-up to the potential of Linux on the desktop. As members of the community we must focus our efforts on making sure they do it right with respect to the community.

Given their experience with HP-UX alone, HP would have no problem pulling together the resources to support another O/S.
With the frenetic pace of technology change, the 'big' players can't afford to not be in the Linux game.
Anybody considering getting a Dell Inspiron Mini with Windows XP Home Edition might want to 'think twice' and order one with Linux instead.
Watch this unboxing and see how long it takes to boot up XP!
Good Lord. Go have a coffee break. :)