ABI Research said the market for ultra-mobile devices, such as netbooks and computer-like handhelds, will produce $3.5 billion in revenue this year, growing to $27 billion in 2013.

Currently only 14% of sales are retail, but that figure will increase more than five-fold to 75% in 2013. Also by 2013 more than half of such devices will use x86-compatible processers and open-source Linux will have twice the market share of Microsoft Windows, ABI analyst Philip Solis wrote in the new report, “MIDs and Mobile CE Market Data.”

Complexity in the market for such devices will be a challenge, ABI noted. Many buyers find it hard to distinguish between what’s a laptop, what’s a smartphone, and what’s in between.

Lofty predictions for such devices are not uncommon, but one obstacle to success is the devices’ form factor – too big to fit in a pocket, too small to be a laptop replacement. That has been an ongoing challenge since the so-called “Hand Held Computer” phase of the 1980s, “palmtops” into the 1990s and “Internet appliances” earlier this decade.