Computer Makers Race to Create $100 Laptop

By Gregory M. Lamb, Christian Science Monitor. Posted May 8, 2008.

The laptop computers most people haul around are underutilized. They hardly break a sweat to read e-mail, stream video, view photos, browse the Web, or run word-processing or spreadsheet programs. Their powerful processors are rarely tested except by heavy-duty gamers, scientific researchers, or other specialized users.

So while some PCs continue to bulk up and tout their speed and raw power, others represent a new trend: slimming down. Way down. These smaller, simpler machines are aimed at a potentially lucrative market: the next 1 billion PC users around the planet.

The market segment is so new it doesn't have a name yet or even an agreed-upon set of specifications. Intel, the chipmaker, calls the category "netbooks," recognizing that much of what people do on their laptops involves going on the Net. The new machines are also being called ultra-low-cost PCs, mininotebooks, or even mobile Internet gadgets.

In appearance, they have the familiar clamshell design, but they're smaller, with seven- to 10-inch screens. They offer full keyboards (albeit with smaller keys) and weigh less than three pounds. Perhaps most important, the majority cost less than $500 - some as little as $299.

Intel says it expects more than 50 million of these netbooks to be sold by 2011. It's introduced a tiny, low-power processor to run them called Atom, which puts 47 million transistors on a chip about the size of a penny.

Seventy to 80 percent of tasks people do on computers today are online, says Uday Marty, the marketing director for Intel's netbook products. Intel has created the Classmate PC to show the potential market for students around the world. In Brazil, they're sold under the Postivo brand. In India, Intel partners with HCL Infosystems to produce them.

The Taiwanese computermaker Asus burst out of the gate last fall with its Eee PC, priced at $299 (with the Linux operating system) and $399 (with Windows XP). Hewlett-Packard, Dell, Acer, and others have similar machines in the works.

"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."

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.

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