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Will Eee PC Get Oohs and Aahs?

STANFORD, Calif. -- With all eyes increasingly on low-cost notebook PC initiatives like One Laptop Per Child, there's a new player in the discount notebook PC market -- or is there?

Taiwanese PC hardware manufacturer Asus announced the availability of its $399 Eee PC Internet "gadget" at an event here today. While the device performs many of the same functions as a typical notebook, company officials said they prefer not to call the Eee PC a notebook, because they're aiming for a different market than the traditional mobile professional or desktop replacement buyer of a portable computer.

Asus Eee
Asus Eee PC
Source: Asus

That target is the youth market. With stripped-down hardware and a colorful, kid-friendly design, the device aims to attract the littlest of PC users. The three "E's" of the device's name refer to "Easy to work," "Easy to learn" and "Easy to play," while the PC itself comes in white, light blue, light green and pink colors.

"Kids don't need all the power of a notebook PC," said Jackie Hsu, president of Asus America Channel, based in Fremont, Calif.

Compared to a standard notebook PC, the $399 Eee PC actually offers several advantages, along with notable shortcomings. The low price, small seven-inch screen size and two-pound weight mean that it's both extremely affordable and portable. Another plus is that the Eee PC's 4GB of solid-state storage makes for quick start-up and shutdown times, with booting requiring only about 15 seconds with Linux and about twice that with Windows XP.

The Eee PC also offers 512MB of memory, an Intel Mobile processor and Wi-Fi connectivity. It also comes with a built-in Webcam and voice control features: An application launcher responds to 14 different commands, such as "Computer Web" to open a Web browser.

On the downside, while bright and crisp, the screen is only a fraction of the size of the typical notebook display. Additionally, storage is limited, and the device lacks an internal CD or DVD drive.

During its U.S. launch event here, Asus demoed both XP and Linux preloaded on the Eee PC, as well as a wide range of applications. But the Eee PC will initially ship with only Linux, thought it will include a graphical desktop of easy to access applications, like e-mail, Google Apps, Open Office, Skype, an Internet radio application and several games.

Hsu said the device's price tag would probably go up to "a little over $400" for a model with XP preloaded. He added that Microsoft Vista would be impractical, given the Eee PCs specs.

Asus, best known as a leading provider of motherboards to PC manufacturers, has for years worked to carve out a brisk business for itself also selling notebook PCs. But the launch of the Eee PC is a relatively large departure for the company, and brings it head-to-head with entrenched competition in a space that's still maturing.

Among the competitors are ultra-portable Windows XP devices, such as OQO and FlipStart, are priced over $1,000 but offer more storage and faster processors.

Other notebooks based on Linux are rumored to be coming from a variety of vendors. There's also the much-discussed $199 One Laptop Per Child that evidently also may be competing for the low-priced notebook dollar domestically, despite its original intention to be chiefly for use in developing countries. Additionally, Intel currently is seeing some success with its own low-cost Classmate PC design, which also ships with either Linux and Windows.

Despite the competition, some are optimistic about the Eee PC's prospects.

"What Asus is doing sounds like a pretty good price for a first PC for kids," IDC analyst Doug Bell told InternetNews.com. "The industry is leaning toward smaller form factors and Asus is looking to expand its presence in the U.S."

Analyst Roger Kay said the Eee PC's design and positioning as a home or Internet gadget is likely an effort by Asus to avoid alienating the numerous system and notebook manufacturers it sells parts to.

"They want to call it a 'gadget' and stay below the radar with their customers," Kay, president of Endpoint Technologies Associates, told InternetNews.com. "But starting at the low end of the market is a good way to generate a lot of volume."

Asus' Hsu said the company is selling the Eee PC now through various online channels but is close to inking distribution agreements with national retailers including Best Buy and Costco.

In addition to the $399 Eee PC unveiled here today, a second model, priced at $299, is also expected form the company. That unit will pair down its specs to 2GB of solid-state storage and 256MB of RAM. Timing on the second model was not disclosed.



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