Office has traditionally played a large role on desktops and laptops, though ultra-mobile devices are rarely a high priority when it comes to development. As low-power netbooks have started to mature, though, it's clear that there were two areas most modern office suites didn't quite fit in. The performance aspect was one, although this has become less important with the rapid adoption of faster hardware. The other was price. If the primary intention of buying a netbook or entry level laptop was to save money, where's the incentive to spend nearly as much on an office suite as you did on the hardware itself?
Competing office suites may not command a large market share but some have a pretty huge price advantage. OpenOffice, for instance, is completely free whereas the cost of the least expensive student license for Microsoft Office is around $69. Exactly at what price range Microsoft will aim this netbook specific version isnít mentioned, nor is what sort of features they plan to shed from it.