The heavy competition with Dell and Acer has forced HP, currently world’s largest PC manufacturer, to start offering its clients low-cost PCs, with Linux OS preinstalled.

For now, the low-cost PCs will be on sale only in Australia for about $AU600 (just under $500 USD). The motivation behind this move is Windows Vista’s hefty price and lack of attractiveness and the increasing demand for Linux-powered machines from tech-savvy consumers.

Industry analysts and Linux addicts have long-ago prophesized Vista’s failure on the market, mainly because of its “hunger” for hardware resources and lack of enticing, new features. Acer’s boss Gianfranco Lanci openly criticized Windows Vista’s low impact on PC sales worldwide, saying that “the whole industry is disappointed” with Microsoft’s next-gen OS.

This is why Dell disrupted Redmond’s hegemony on its laptops and desktops with the breakthrough contract signed this summer with Canonical, the company behind Ubuntu. And the same reason stands behind HP’s decision to put Red Hat’s Enterprise Linux 5 on Compaq dx2250 computers sold across the Aussie territory.

According to APC Magazine, we’re talking about machines with AMD processors, ranging from entry-level Sempron 64 CPUs to Athlon 64 and high-end Dual Core X2.

“With the cost of proprietary systems continuing to rise, Red Hat Enterprise Linux 5 Desktop minimises acquisition and ongoing deployment costs, leaving more money and resources for other high-value projects and tasks,” said Max McLaren, General Manager at Red Hat in Australia and New Zealand, taking a clear dig at Vista.

Red Hat Enterprise Linux 5 is packed with Mozilla’s FireFox browser, Evolution mail client and OpenOffice, the trimmed-down version of Sun Microsystems’ StarOffice- although users can also download the Linux-compatible Google Pack suite for free, which includes StarOffice as a standard software offering.

Red Hat confirmed that they will also offer Level One, Level Two and Level Three technical support for HP’s solution, but no word yet about the latter’s support for the included free software.