Linux has the potential to power the bulk of mobile Internet devices, some analysts say.

In a report released this week, ABI Research says that the Linux operating system appears positioned to take the lion's share of the market for devices that are bigger than a cell phone but smaller than a laptop.

So far, devices in this category haven't enjoyed significant success in the market. But some of the available products are run by Linux, and more are appearing.

Nokia's N800, for example, is a small handheld device with a screen larger than a typical mobile phone and running the Maemo Linux operating system. Nokia has been selling the line of devices since 2005 but hasn't revealed sales figures.

In addition, the Moblin community is actively developing a Linux OS designed for mobile Internet devices (MID), and the software is being tightly integrated with Intel's Atom processor built for the device category, ABI notes. Most products based on the software and chips are hitting shelves this year.

Because the MID market is new and requires a new operating system, Linux has a good chance of success because it is on equal footing with others, ABI reports. Its flexibility and cost advantage compared to Windows Mobile may pay off here, says Stuart Carlow, an ABI analyst, in the report.

LiMo, the mobile phone Linux platform, is also being designed with MIDs in mind, ABI says.

Forward Concepts, another research group, also sees potential for Linux in the MID market. While Microsoft could make some headway with Windows Mobile in the segment, Linux will be popular for its lower processing overhead, said Will Strauss, an analyst at Forward Concepts, in a recent report.

Both researchers have similar predictions for the future growth of MIDs. Forward Concepts expects MID shipments to grow from 305,000 shipments this year to 40 million in 2012. ABI predicts unit volumes of 50 million per year in 2013.