INTEL SAID this week that sub-$300 (€194) laptops initially designed for poor children will soon be available to European and US consumers in a move that could further push down computer prices.

PC makers in the US and in Europe will sell a yet-to-be-unveiled, second-generation version of the Intel-designed Classmate PC for $250 to $350, said Lila Ibrahim, general manager of Intel's emerging market platform's group.

"This is a very big deal," said Laura Didio, an analyst with Yankee Group who follows the personal computer industry.

While the machines are intended for children, analysts said the launch will add momentum to the low-cost computing movement - and will likely mean this year's bargain-basement laptops will have more power than in previous years.

"Particularly in a recession year, quality low-cost products are going to move well," said Rob Enderle, an analyst with the Enderle Group. "But the key is for them to be quality."

Mr Enderle said while he hasn't yet seen the machines that will be on sale this Christmas, he suspects consumers will be able to get "a pretty decent" laptop for less than $600 and perhaps for less than $500.

Didio said retailers might throw in another $50 to $100 in rebates or other incentives.

Laptop prices have been under extra pressure since last year, when Taiwan's Asustek Computer Inc introduced the $399 Eee PC, which has flown off store shelves from Asia to North America.

The machine runs on the Linux operating system, and people used to Microsoft's Windows and Apple's Mac OS X operating systems have had trouble adapting to the system, Mr Enderle said.

The new, cheap laptops being developed from Intel's technology will likely run on Windows, he added.

The movement toward low-cost computing was also spurred by the XO laptop, the brainchild of Massachusetts Institute of Technology professor Nicholas Negroponte (one of the advocates of the failed MediaLab Europe in Ireland) and his One Laptop Per Child Foundation.

The foundation began producing a laptop running on Linux at a cost of $188 in November. It sold them in the US and in Canada for $400 through a charity drive that also provided one machine to a poor child overseas.

The chipmaker has conducted pilot tests of the Classmate PC at schools in Texas, Oregon and California, along with some schools in Australia, said Intel spokeswoman Agnes Kwan. -