Asustek's low-cost Eee PC will sport Windows XP

Microsoft's Windows XP OS will be on a version of Asustek Computer's ultra-low-cost laptop, Eee PC, by the end of this year, the companies announced Tuesday.

The Eee PC is a laptop designed for children and emerging markets that weighs less than one kilogram and has a 7-inch LCD screen. Asustek officially put the first version of the Eee PC, costing NT$11,100 (US$340), on sale Tuesday at 5 p.m. in the Neihu District's popular 3C store, run by Tsann Kuen Enterprise of Taiwan.

Asustek announced three other configurations of the Eee PC that it will release by the end of November. All four versions of the Eee PC will run a Linux OS from Xandros of New York.

The Eee PC won praise earlier this year as another low-cost alternative to laptops such as the XO developed by the One Laptop Per Child Project (OLPC). OLPC hopes to someday whittle down the price of its laptop design to $100 from around double that currently. The cheapest Eee PC announced Tuesday, the Surf with a 2GB flash memory drive, will retail for NT$7,999 (US$245) when it comes out around the end of November.

Microsoft hopes to tap into the growing excitement in the ultra-low-cost laptop space, but Asustek won't launch an Eee PC with Windows XP on board until the end of this year.

"XP fits the low-cost segment," said Davis Tsai, general manager of Microsoft Taiwan.

But the trouble with the OS is that Microsoft is trying to retire it in favor of its new OS, Vista. Microsoft has already agreed to extend sales of XP through June 2008, Tsai said. Beyond that, the future is unclear for the OS.

The groups making low-cost laptops would likely not take well to using Vista since the OS requires more hardware, including more RAM and much larger hard disk space. The configurations would make a laptop far more expensive than the components required for XP.

When asked if Microsoft will continue to sell XP to the low-cost segment of the PC industry, Tsai said the company will work with partners on the issue. He declined further comment.

Asustek showed off one Eee PC running Microsoft Windows XP Professional, version 2002, service pack 2. The hardware on board was the same as for the NT$11,100 Linux-based Eee PCs the company had displayed, a 900MHz Intel Celeron M processor, 512MB of DDR2 DRAM, and 4GB flash drives.

The Windows Eee PC included Office 2003 versions of Excel, PowerPoint, and Word.

The Linux Eee PCs on display contained over 40 applications, including Skype's popular Internet telephony software, the Firefox Web browser from Mozilla, and quick links to Google's Documents and other services. The laptops also included on-board word processing software and several educational tools and games designed for kids.

The two lower-cost Eee PCs announced Tuesday were both nicknamed Surf. The NT$7,999 version included 256MB of DDR2 DRAM. The more expensive Surf included a 4GB flash drive and 512MB of DDR2 DRAM, and it will cost NT$9,999 when it comes out in mid-November.