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$250, equipped with an older 1GHz processor from Via Technologies, 128MB of memory, a 40GB hard drive, Linux software and a 15-inch screen.

Via will join in with its own Terra PC in the fall. The Terra comes with the same basic configuration as its Xenitis competitor, but the operating system and the basic applications are loaded on a flash memory chip, not the drive--making the computer less susceptible to viruses and other problems.

Via, however, admits that it will need to select battle-hardened software. "There is no way I am going to take care of all of the problems," said Ravi Pradhan, country manager for Via. "The idea is to get as close to perfect as possible."

Others are taking a more socialistic approach to lowering costs. Intel, for instance, promotes communal arrangements that spread the cost of a computer across an entire village.

In the southern state of Kerala, Intel has helped the government launch a program that assists local entrepreneurs in lining up financing to set up an "Akshaya Center"--sort of an Internet cafe--and pays them to provide PC training to one member of each family in a village. The Akshayas also provide videoconferencing for families with overseas relatives, data entry for local cooperative banks, and links to commodity exchanges.

The system is modeled after a long-established practice in which India's ubiquitous pay phones are owned by individuals, not the national telecommunications companies. "Akshaya could become one of these programs that scales out across the country," Sampat said.

Thin is finally in
The Indian market may also finally provide an outlet for the so-called thin client, a type of basic computer tried repeatedly in North America and Europe by Oracle and Sun Microsystems with little success. Thin clients, sometimes known as network computers or "dumb terminals," effectively are used only to communicate with a server; the server itself is the device that stores the data, houses the applications, performs the calculations and connects to the Internet.

Although a server can only handle a finite number of thin clients, advocates say the systems reduce both hardware costs and support headaches.

Professor Deepak Phatak of the Indian Institute of Technology conducted a study of computer use in a bank and determined that thin clients would cost about a third as much as multifunctional personal computers. A large insurer installed 13,000 of the machines after the study, he said, and other companies are contemplating similar moves.

"Ninety-five percent of the employees only used a single application," Phatak said. "Fifteen thousand rupees ($357) gets you a thin client with support for three years."

Moreover, proponents say, these systems are more than just typical thin clients with used monitors.

"Just because we are an emerging market doesn't mean we want an inferior product," said Jain of Novatium. The engineering behind his company's base model illustrates his point.

Instead of a microprocessor, it will contain a digital signal processor that compresses and decompresses music and video files. In addition to lowering costs, the technology is designed to provide access to the full range of the Internet without bogging down the machine's operations. (Novatium would not disclose which chip brand it would use, but one of its investors is also the chairman of digital signal processor designer Analog Devices.)

Using Linux applications and software from Jain's Netcore Solutions, these machines will be tweaked so that multiple people can use them. This would reduce the cost of memory in the server that does the bulk of the computing work for the Novatium thin clients on its network.

Jain will also try to establish "operator grids," local businesses that run the servers while acting as an Internet service provider. Eventually, instead of buying their machines, he said customers could have the option of paying a grid operator $15 to $20 a month for all hardware, software and storage needs.

While acknowledging the risks inherent in any start-up venture, Jain speaks eagerly of what he calls the phenomenon of the black swan--a rare, but not impossible, event.

"Google was a black swan," he said. "No one expects the next Microsoft or Intel or Cisco to come out of India, but I believe it is entirely possible."