Page last updated at 09:17 GMT, Thursday, 29 May 2008 10:17 UK

Dell joins cut-down laptop market

Dell netbook
Dell enters the netbook market with this unnamed machine

Dell is joining the burgeoning ranks of companies offering cut-down laptops, called netbooks, aimed at the developing world and general consumers.

The laptop was shown by Michael Dell to the editor of website Gizmodo at the All Things Digital Conference.

According to the official Dell blog, Michael Dell "positioned it as the perfect device for the next billion internet users".

Dell has not released pricing or specifications for its first netbook.

A number of firms are expected to enter the netbook market this year.

The market is being driven in part by the work of the One Laptop Per Child programme, the success of the Asus Eee PC and the availability of chips, made by companies like Intel and Via, designed for low-cost, low power consumption devices.

Hewlett-Packard has announced a cut-down laptop which will be powered by Via's processors, and Acer is also entering the market.

More than 3.6 million netbooks, which cost less than $500, are expected to be sold this year.

Asus believes it will sell almost two million of its Eee PCs, which cost between $299 and $549, in the first six months of this year.

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At the Computex show in Taiwan next week Intel is expected to unveil a number of manufacturer partners that are using its Atom chip.

Intel chief executive Paul Otellini said the market was growing fast.

"I've not seen energy like this from our customers in a long, long time," Mr Otellini told The Associated Press.

"Everyone views this as being sort of hyper expansive to the existing market."

Intel is also pushing a range of even smaller machines, called Mobile Internet Devices (MIDs).

Vista has a larger memory footprint, a larger graphics requirement and a higher price point. This is all about low-cost computing
Paul Otellini, Intel

Mr Otellini said he was not concerned that low-power processors could "cannibalise," or steal sales from Intel's high-end products.

"If a higher-priced notebook isn't substantially better and doesn't offer more utility, shame on us," he said.

"If there's cannibalisation, I'd rather be the cannibal than someone else."

Mr Otellini said he expected MIDs to be powered by Linux rather than Microsoft's operating systems.

"Vista has a larger memory footprint, a larger graphics requirement and a higher price point. This is all about low-cost computing," Mr Otellini said.

The success of the Eee PC and the rush by many companies to release similar products has seen a recent about-turn by Microsoft.

The company has said it will extend support of its XP OS on sub-notebooks, in an effort to thwart the growing use of Linux on such machines.

It has also slashed the cost of a licence for XP running on netbook machines to just $32 (17) and 14 in developing countries.

In an effort to grab a slice of the market Via has announced a new hardware design for low-cost laptop computers, called OpenBook, making it available under an open source license.

The company hopes manufacturers will use the design, which incorporates Via's chipset, to build netbooks.

Last week the One Laptop Per Child program also unveiled a reference design for a future netbook, called the XO2.

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