Smartbooks are a new class of device built around ARM-based chips from companies like Qualcomm, Freescale Semiconductor and Texas Instruments. A number of PC makers are working on smartbook designs, which are targeted at the space between smartphones and netbooks. Microsoft's new Windows 7 operating system designed to run on the x86 instruction set used by Intel, and AMD and won't run on the ARM-based processors, Microsoft said. The news comes days after ARM said it planned to grab a foothold in the fast-growing netbook market this year, and that it was aiming for a 30 percent share of the entire market next year. "For people who want a PC, albeit a different chipset, we don't think those will work very well," Steve Guggenheimer, Microsoft's corporate vice-president for original equipment manufacturers, told Reuters during an interview at Computex.