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More computer brands chase the '$100 laptop'

Bye bye, bulk. New lines of tiny PCs fit both in your purse and into third-world classrooms.

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"There's a lot of potential for these products," says Michael Gartenberg, vice president and research director at Jupiter Research in New York. Ultraportable computers have been around for more than a decade, he says. What's new is the low price, making them "attractive as perhaps a second or third computer for a household, or a primary computer for a student."

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They represent the idea of the "ubiquitous computer – the computer that you can have with you at all times," he says. These micro-PCs are more likely to eat into laptop sales than threaten even-smaller hand-held devices, phones with extra features such as Web-browsing, Mr. Gartenberg says.

For one thing, the minilaptops have battery lives of only a few hours, not days, making them not yet ready to be "always on" companions.

"I really think the unknown dynamic is what happens when these $200 to $300 netbooks are unleashed in India and China and Indonesia," said Paul Otellini, president and CEO of Intel, in a conference call to industry analysts on April 15. "And we don't [know]. There is no model for that at this point in time because you are dealing with something that's never existed before."

The tiny laptops, some roughly the size of a large paperback book, are far too large for a pants pocket, but could easily fit inside a purse. The smaller keyboards may work well for children. Many run on an operating system called Linux, favored by the technorati but little known among most computer users. Those that include Microsoft's familiar Windows usually cost a bit more. Microsoft has said it will continue to allow manufacturers to sell its older Windows XP system in the minilaptops, saving on both cost and system operating requirements over the newer Windows Vista.

The nonprofit model

These for-profit ventures follow in the footsteps of the nonprofit One Laptop Per Child (OLPC) project in Cambridge, Mass. Many were skeptical when OLPC announced several years ago that it would develop and distribute small laptops to children across the developing world for $100 each.

In recent months several top executives have stepped down from OLPC, leaving some critics to wonder if its mission is still viable.

While OLPC hasn't reached its original aim of $100 PCs, it is selling its tiny laptop, called the XO, for $189, still lower than the for-profit ventures. That price includes some special educational features and software developed by OLPC for the Linux OS.

Nicholas Negroponte, founder and chairman of OLPC, says that the XO is already Windows capable and he expects it to include a version of Microsoft's operating system in the future. He hopes the new for-profit competition will spur manufacturers to develop better technologies and drive costs even lower.