Low-cost PC aims at rural China

China's online population will soon overtake the US

The rush to grab a share of the huge and potentially lucrative market for PCs and laptops in China continues.

Beijing-based Lenovo, which acquired IBM's PC division in 2005, has announced a low-cost computer aimed at the country's vast rural population.

The $199 (£99) machine will plug into a TV and come with educational software.

PC sales in China grew by 23% in the last quarter, according to researchers at Gartner, and its online population could overtake the US by 2009.

About 60% of China's 1.3bn residents live outside of the main urban areas. According to the World Bank around 150 million people in the country live on less than $1 a day.

"Our focus is to get down to the rural market," said company spokesman Jay Chen.

Earlier this year, the world's second largest computer-maker Dell also announced plans for a low-cost personal computer for the world's most populous country.

The machine comes in two configurations with either a 40GB or 80GB hard drive and the Windows XP operating system

"Today there are one billion people online worldwide, and many of the world's second billion users are right here in China," Michael Dell, founder of the company, said at the launch of the machine in March 2007.

Business move

Other firms are chasing the emerging PC market in the developing world.

The Eee PC is one of two offerings from chip-maker Intel

In June this year, chip-maker Intel teamed up with the world's largest maker of computer motherboards Asustek to produce a $200 (£100) laptop.

The laptop, dubbed the Eee PC, will sit alongside Intel's Classmate PC which is also aimed at the developing world.

The Eee will have a seven inch (18cm) display, weigh in at 2lb (0.89kg) and contains a flash memory hard drive and wireless.

Software giant Microsoft has also made moves to secure market share in the developing world.

In April 2007, it announced that it would sell a software package - containing Windows XP Starter Edition, Microsoft Office Home as well as other educational software - to governments which provide free PCs for schools.

The software will sell for just $3 (£1.50) in some parts of the world in an attempt to double the number of global PC users.

"This is not a philanthropic effort, this is a business," Orlando Ayala of Microsoft said at the launch.

Rural ideal

Other non-commercial initiatives are also trying to boost computer literacy in developing countries, notably the One Laptop per Child project.

OLPC has tested the XO machines in many countries

The OLPC project is in the final stages of developing a low cost, durable laptop, designed to work specifically in an educational context.

The organisation has just begun production of millions of laptops running a Linux operating system, which will start to be delivered to developing nations in October this year.

The eventual aim is to sell the XO machine, as it is known, to developing countries for $100 but the current cost of the machine is $176.

Lenovo, the world's third largest PC maker, have not released the specification of its PC but has said it will cost between 1,499 and 2,999 Yuan ($199).