Intel, Asustek plan low-cost laptop

SAN FRANCISCO/ TAIPEI Tue Jun 5, 2007 3:53pm EDT

1 of 2. A salesman of Asustek Computer Inc. shows the new Eee PC 701 notebook, 17.8 cms (7 inches) by size, during the first day of the annual 2007 Computex inTaipei June 5, 2007. Intel Corp. has detailed plans to team up with Asustek Computer Inc., the world's largest maker of computer motherboards, to make a notebook PC that would cost as little as $200 and be aimed at mass markets in developing countries.

Credit: Reuters/ Nir Elias

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SAN FRANCISCO/ TAIPEI (Reuters) - Intel Corp. (INTC.O) has detailed plans to team up with Asustek Computer Inc. (2357.TW), the world's largest maker of computer motherboards, to make a notebook PC that would cost as little as $200 and be aimed at mass markets in developing countries.

Intel, the world's largest chipmaker, has distributed laptops to children in developing countries for years, but has yet to put them into the kind of mass production planned by another group, the One Laptop Per Child Foundation (OLPC).

Most recently, Intel has launched its Classmates initiative, which aims to ship a modest 1,230 low-cost PCs to governments in Asia this year, mostly in trial arrangements.

Intel and Asustek's low-cost PC would be a fully fledged, low-end notebook, while the OLPCs are green-and-white plastic, kid-friendly laptops that can be powered with hand cranks when electricity is not available. They cost about $180 each.

"It's another way of solving the same problem," said Sean Maloney, head of Intel worldwide sales and marketing in a telephone interview ahead of his keynote speech at Taiwan's Computex, the world's No. 2 computer fair. "The world is a big place and there's room for lots of these things."

Unlike Intel's previous efforts, which targeted mostly governments as clients, the Asustek models would target mass consumers through conventional channels, Asustek global marketing director Sunny Han told Reuters on the sidelines of Computex.

He said Asustek planned to start shipping the units, which have smaller screens than traditional laptops, in July or August, with a target of selling 200,000 units this year, all under the Asustek brand.

The units would sell for $199-$299.

LOW-COST COMPUTING

The Asustek initiative comes after the OLPC Foundation said last month it expected to start delivering millions of its low-cost notebooks in October.

It is the foundation's most ambitious attempt yet to provide the devices, which analysts say could shape PC industry growth in developing countries.

Maloney said the laptop would use a lower-end microprocessor as the brains of the notebook, but declined to give details.

Intel Asia Pacific General Manager John Antone said the Asustek initiative marked a milestone in low-cost computing, but that the trend should continue as PC makers looked to boost sales to developing markets.

"What we've seen is the entry price point tends to trend down at 8 to 10 percent rate" per year, he said at Computex.

Maloney also introduced Intel's 3-Series chipset family, which is designed from the ground up to run Intel's upcoming 45 nanometer processors, code-named Penryn, that are expected later this year. Chipsets are a collection of memory, input- output and other chips that connect the processor to the motherboard.

"These chipsets will be the basis for most of the PC industry for the next 18 to 24 months," Maloney said.

"They're not just 45 nanometer ready, but they're much more energy efficient than previous versions."

The Penryn processors are made with circuitry as small as 45 nanometers, about 1/2000th the width of a human hair and can have higher performance at the same power consumption, or the same performance at lower power consumption, or various combinations of the two.

Intel is introducing the chipset family as it regains ground lost over the last two years to smaller rival Advanced Micro Devices Inc. (AMD.N).

AMD's market share in the first quarter of this year slipped more than 5 percentage points to less than 20 percent for the first time since 2005 as Intel revamped its own product line with its Core and Core 2 processors. It also slashed prices on older chips as it ramped up production of faster microprocessors.

(Additional reporting by Doug Young in Taipei)

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