* First company to launch netbooks using Google's Android
* Move could threaten Microsoft's market dominance
* No prices yet, but analysts say Windows XP costs about $25 (Adds details, quotes)
By Kelvin Soh
TAIPEI, June 2 (Reuters) - Acer Inc (2353.TW), the world's No. 3 PC brand, plans to sell netbook PCs that run on Google's (GOOG.O) Android operating system, posing a potential threat to Microsoft's (MSFT.O) Windows.
Acer was the first PC vendor to officially announce that it was making Android PCs, weeks after it said it planned to launch smartphones -- mobile phones packed with advanced computer-like capabilities -- on the same platform later this year. [ID:nLM681177]
"Today's netbooks are not close to perfection at all. In two years, it will all be very different," Jim Wong, Acer's global president for IT products, told a news conference at Computex, the world's second-largest PC trade show held in Taipei.
"If we do not continue to change our mobile Internet devices, consumers may not choose then any more."
Wang declined to give any shipment targets or prices for the Android netbooks, which will run on Intel's (INTC.O) low-cost and low-performance Atom processor, but said the company would continue to ship netbooks with Microsoft Windows.
Netbooks are stripped-down PCs optimised for surfing the internet, and usually cost around $300 each. A computer running on Android could be cheaper as analysts have previously said PC brands pay about $25 to install Windows XP into each netbook.
Android could cost less as its open source nature means developers and brands are free to use it and change it to suit their own needs.
"When we are doing this new Android netbook, we are not going to make the other one go away," Wong said. "Both systems will still remain available to customers, and one will not go away because of the other."
Analysts said it was still too early to say whether Android could really threaten the dominance of the Windows operating system in the PC world, pointing to an absence of software and applications that support Android.
"We'll still have to see what kind of applications the Android software can run on and how stable it'll be," said Vincent Chen, an analyst at Yuanta Securities.
Android, an open-source software that is meant for mobile phones, was first used by HTC (2498.TW) in its smartphones, but many PC brands, such as netbook pioneer Asustek (2357.TW), have expressed interest in using it in its netbook computers.
The announcement came after Taiwan's market closed. Acer's shares ended 0.83 percent higher, outperforming a 0.07 percent decline in the main TAIEX index .TWII. (Additional reporting by Roger Tung; Writing by Lee Chyen Yee; Editing by Nick Macfie)