Taiwan's Acer has been on a tear recently. The company gobbled up Gateway quite a while back and has been a top maker of red-hot netbook PCs so far this year. The PC maker has now said that it will be featuring Google, Inc.'s (NASDAQ: GOOG) 's Android operating system on future netbooks as an alternative to what it ships on most of its netbooks -- Microsoft Corp.'s (NASDAQ: MSFT) aging Windows XP operating system.

The difference here is that while Microsoft XP still may cost a little to Acer and all other PC makers circulating netbooks on the market, Android is a freely-available, open-source product. Acer won't pay a dime for each copy of Android in installs on its netbooks, which -- interestingly enough -- may be the first real head-to-head equitable competition between Google and Microsoft.

Taiwan's Acer, which is the world's third-largest PC maker, said that its Q1 results included a 31% profit decline as the recession continued to hit PC sales and PC makers were taking advantage of selling more PCs at the same time.

PC makers Dell Inc. (NASDAQ: DELL) and Hewlett-Packard Corp. (NYSE: HPQ) entered the new netbook computer category in 2008, hoping to capitalize on any new growth area in the industry. The PC market has not really come to a standstill, but laptops continue to outshine desktop PCs and even at that, overall sales have slowed. These net netbooks, which are really tiny laptops with small screens and minimal power, are meant for just that -- mostly net usage (internet, that is) -- and not much else.

But it's Taiwanese PC maker Acer that has stolen the show as of late. Taiwanese company Asus made the netbook category popular quite some time ago with the Eee PC, but it has been Acer that has been the most aggressive on pricing and marketing its netbook products. For example, you'll find Acer's netbook offerings at national retailers for $249 and up -- quite the discount from even the lowest-end laptop PC.

Netbook global sales in the third quarter of 2008 hit 5.61 million units, an increase of 160% from the second quarter. Acer was at the top of the list with a 38.3% market share of all those units. With a 2008 sales level of 14 million units (over 2007's one million sold), the market for netbooks is still relatively small, but the growth is explosive. The question is this: how much margin are manufacturers gaining on these small-priced PCs? In the latest quarter, HP was in third place and Dell was in fifth place, but Acer and Asus are completely stealing the show. If the netbook trend follows in 2009, Acer -- the king of low retailer PC prices -- should stay on top until this fad is over.