Netbook vendors are considering keeping their Intel Atom N270 and N280-based netbooks using Windows XP and will not offer upgrades to Windows 7 due to increasing costs and low consumer demand, according to industry sources.

The current price of Windows XP OEM version is only around US$25-30, but the latest quotes from Microsoft for the netbook version of Windows 7 is around US$45-55 and therefore first-tier vendors are unable to transfer the cost to the netbooks’ sales price due to the fierce competition.

The first-tier notebook vendors are still negotiating with Microsoft hoping to bring the price down.

Since most consumers think Windows XP is enough to handle their needs in a netbook, the Upgrade to Windows 7 Program will provide less incentive to attract consumers to purchase netbooks.

Currently, most netbook vendors are focusing on only adopting Windows 7 in their next generation Atom N450-based netbooks, while some vendors are considering offer upgrades for their N280-based products.

In additional news, Intel plans to announce the single-core Atom D410 and dual-core Atom D510 for nettops in October 2009 replacing the current Atom 230 and 330. Atom 230 and 330 will be phased out in the first quarter of 2010.