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"About 60% of them will have Windows XP operating system," confirms Asus chairman Jonney Shih, reiterating his belief that the company will ship around five million units this year, up from the 300,000 units shipped in 2007.

"A Windows Eee PC is more attractive to buyers because people are just not used to using Linux-based computers," says Alvin Kwock, analyst at JP Morgan.

Microsoft believes the move will prove beneficial to both companies.

"There is a huge untapped computer market out there, and we want to get into the next ten billion consumer market (with these lower cost computers)," says Davis Tsai, president of Microsoft Taiwan.

Asus is working hard to promote the Eee PC brand, releasing a string of new models including the Eee PC 900 which features a 9in screen, and models with larger storage and memory capacities.