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Updated at 11:30 a.m. PT with pricing info.

(Credit: LaptopMag.com)

Intel has a convertible Netbook on tap for the CES 2009 crowd assembling once again in Las Vegas next month.

Laptop magazine got a sneak peek at the newest version of the low-cost Classmate PC. It has an 8.9-inch swivel screen with touch and stylus input, a Web cam, and 1.6 GHz Intel Atom processor, 60GB hard drive, and Windows XP, with a few Intel touches to make XP work for the convertible form factor. So far, that includes Vision Objects Pen Input, which makes anything input via the stylus editable as text, as well as a virtual keyboard.

It's manufactured by CTL, like the original Classmate PC (which Intel will continue to sell). Laptop reports that it will begin shipping in mid-January.

Intel says that the price for the convertible Classmate will be slightly more than the original Classmate. The range will likely be somewhere around $250 and $400, though the company said it can't be more specific right now.

Brooke Crothers contributed to this report.

Intel is working on the next version of its low-cost laptop, which could be ready in the next month or so, according to a report in PC World.

The current version of the Classmate PC, to be updated by Intel soon.

(Credit: Intel)

There are no pictures, and very few concrete details on what changes are in store for the device, which is intended for school children. Intel would only say it will have a "new look and feel," and will get both hardware and software upgrades.

We may already have a clue as to what tweaks the software might be getting. Last month, Sugar Labs, a spin-off of rival low-cost laptop maker One Laptop Per Child (OLPC), said it would develop a version of its Sugar interface for the Classmate PC.

The version currently shipping runs Linux and just got a spec bump: It now contains a 1.6-gigahertz Atom processor and 1GB of memory.

Though originally intended for education applications in developing nations, earlier this year Intel began making the Classmate available at retail in the U.S. and Europe.

The inventor of the Sugar user interface used in the One Laptop Per Child's XO says his company is developing a version for Intel's own low-cost laptop.

(Credit: Intel)

Walter Bender said in an interview Thursday with PC World that "a community volunteer is working with Intel on Sugar for the Classmate PC. Sugar Labs helped to expedite the relationship."

Bender is the inventor of the kid-friendly interface, which sits on top of a computer's operating system. His company, Sugar Labs, was spun off from OLPC in May. At the time of the announcement, Bender said Sugar Labs was already talking about sharing the UI with at least four other low-cost laptop makers, including Asus.

He described OLPC as the "primary, but not exclusive, downstream project" for Sugar Labs, and confirmed that the two companies continue to work together on further development of the UI.

That Intel will be working tangentially with OLPC again is notable. The chipmaker left its position as board member of OLPC in January, citing "fundamental differences" between the two companies' visions for low-cost computing. Previous to that, OLPC's founder Nicholas Negroponte had asked Intel to stop selling their Classmate PC platform because it was interfering with sales of the XO. Unsurprisingly, Intel declined his request.

More low-cost laptops are headed to a retailer near you.

Intel plans on expanding the distribution of its inexpensive, school children-friendly Classmate PC to U.S. and European retail outlets, according to a Reuters report on Wednesday.

Intel's Classmate PC

(Credit: Intel)

The Classmate will sell for $250 to $350, Lila Ibrahim, general manager of Intel's emerging market platform group, told Reuters. Apparently Intel has already been conducting pilot programs using the devices in classrooms in the U.S. and Australia.

Though the Classmate is already available on the retail markets of India, Mexico, and Indonesia, this will be the first time the device has been for sale to consumers in the developed world.

Intel designed the PC for use in schools in developing nations. Local manufacturers build them with customized software configurations for the needs of specific local markets.

The XO from the One Laptop Per Child initiative, which also builds low-cost notebooks for the same markets, has been available via retail in the U.S. for a while. OLPC had a promotion where consumers here paid $400, which bought one XO for them and one for a school kid in the developing world.

But they're not the only ones jumping into this fray. Asus launched its low-cost, stripped-down Linux-based Eee PC last fall specifically for the U.S., Japanese, and European retail markets, and caused quite the stir. It sold 350,000 units in the first quarter it was available here, and is making some of the biggest names in computing a wee bit nervous. It's giving pause to worldwide PC leader Hewlett-Packard, and second-largest notebook manufacturer Acer, both of whom are said to be readying their own low-cost, small form-factor laptops for sometime this year.

The Eee PC certainly is bringing cachet to the tiny, Linux-based laptop segment, but will that translate to the cheaper Classmate PC? The Classmate is a bit clunkier looking, and has a silly-looking (though great for kids) handle on the spine, whereas the Eee comes in a variety of colors and looks like a laptop an adult wouldn't mind being seen with at his or her local coffeehouse.

The Intel Classmate and Asus Eee

We were recently lamenting the vaporware status of many of the small, low-cost laptops tech types have been buzzing about this year. Apparently, this whole blogging this really works, 'cause less than a month later, two of our MIA systems are sitting right here in the CNET Lab.

First up is the Asus Eee PC. The company's 2-pound, 7-inch, Linux-based laptop built up a lot of buzz for promising a reasonably functional machine for about $200. In reality, it ended up costing $399 (for the middle-of-three model we got), but it's still a creative take on the ultraportable laptop.

With 512MB of RAM and a 4GB solid state hard drive, the Eee uses a custom Linux install instead of the Windows operating system. In our initial hands-on tests, the setup actually worked quite well, with plenty of preinstalled software--Firefox for Web surfing, Open Office for productivity, plus Skype and a generic media player. Much anything beyond that is probably outside the scope of the system's limited hardware.

Note the Classmate's built-in handle

One plus is the SD card slot--pop in a 4GB SD card, and you've doubled the hard drive space. Just don't expect to keep your entire MP3 collection on there.

Right after the Eee showed up, we got another inexpensive pint-sized laptop dropped off at our doorstep. This time, it was the Intel Classmate PC. Designed by Intel as a low-cost laptop for schools in developing countries, we've been itching to get one since we got a detailed hands-on preview over the summer.

The Classmate starts at $225, and for around $350, you can get it preloaded with Windows XP and Microsoft Office 2003 (although its not currently available to individual consumers), and it comes in various configurations--ours had a 900Mhz Intel Celeron CPU, only 256MB of RAM, a 2GB flash hard drive, and a specially stripped down version of Windows XP, designed to fit on the tiny hard drive. The Classmate is larger than the Eee, with a thick plastic shell designed to withstand the rigors of the developing world and a leather cover with a built-in handle.

Check out these pics for a side-by-side comparison, and stay tuned for full reviews and videos of these two low-priced laptops next week.

Alongside the much-talked-about One Laptop Per Child (OLPC) project, Intel has also been working on a low-cost laptop for schools in developing countries, called the Classmate PC. Sold by local OEMs, who offer customized software configurations for the needs of each individual market, tens of thousands of Classmate PCs are already in use around the world, either as part of pilot programs or purchased by governments, private schools, or philanthropic organizations. Wilton Agatstein and Larry Carr from Intel dropped by our New York offices this afternoon to give us a hands-on demo of the Classmate.

The Intel Classmate PC

The most obvious difference between the Classmate and the OLPC is the price. The OLPC is designed to cost around $175 and runs open-source software. The Classmate starts at $225, and for around $350, you can get it preloaded with Windows XP and Microsoft Office 2003--Intel says it's important for children to learn how to use commercially available software to prepare for the workplace. The versions of the software provided have been carefully stripped down to fit into the Classmate's small flash-based hard drive.

The Classmate PC is available with either Linux or Windows XP, 256MB or 512MB of RAM, and either a 1GB or 2GB SSD hard drive. The 7-inch screen has a native resolution of 800x480, and the system includes headphone and mic jacks, speakers, two USB ports, 802.11b/g Wi-Fi, and an Ethernet jack. With a 900MhZ ultralow-voltage Celeron processor, Intel says it should run for about three hours per charge.

The cover acts as a carrrying handle.

Giving the Classmate a brief hands-on test, we found its diminutive keyboard to be not dissimilar to those found on other ultraportable laptops. The round touch pad was unusual, but easy to use, and the entire system felt very sturdy, as it is built into a semirugged housing, and includes a slightly padded removable cover that also acts as a handle.

It was surprising to see Windows XP run so smoothly on a system like this--the Classmate seemed speedier at first glance than some very expensive ultraportable laptops we've look at recently. Surfing the Web was a breeze, but the low screen resolution hindered us slightly. Opening multiple windows at once finally slowed the system down a bit, but the anecdotal performance was still very impressive.

We had a demo of some preinstalled classroom software. The Classmate PCs all come with the client software, while a teacher with a more fully featured laptop would run the host. From the host laptop, the teacher can monitor the students, send them text messages, send work on one student's screen to all the other systems on the network, or even remotely "silence" the Classmates, turning off their screens (for when you really want the class to pay attention to you).

While a $350 laptop isn't too far removed from some of the $500 budget laptop specials we've seen from big-box retailers, we were still impressed with our first hands-on experience with the Classmate PC. Upgrades in the works for next year include an optional Web cam and a larger 9-inch screen. We plan on putting one of the current units through our standard suite of laptop benchmarks in the coming weeks.