Intel Corp., the world's largest maker of x86 microprocessors, said late on Wednesday that its partners among computer makers planned to start selling low-cost mobile computers originally created for growing markets in the European Union and the United States. The move may completely reshape the market of low-end computers in the well-developed markets.

"PC makers in the United States 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, in an interview with Reuters.
Intel declined to identify the PC makers or discuss the features of the second-generation machine, which has not yet been released in developing markets, at the request of the companies, the news-agency indicated.

There are several companies targeting developing markets with their low-cost computers and there is a number of firms trying to push their entry-level devices onto the markets of the EU and the U.S. One of such companies is Asustek Computer, the world's larger producer of computer mainboards, who has been pushing its Eee PC notebooks for about half a year now. Asus Eee PCs are relatively popular both in Europe and the USA.

Intel and its parners have been developing so-called Classmate PCs for several years now, targeting emerging markets. But as the demand towards expensive personal computer systems is likely to slump in the upcoming quarters due to various factors, those Classmate PCs may easily substitute more expensive systems on the market and face strong demand, Intel and PC makers seem to believe.

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

At present Asustek sells its Asus Eee PCs for $299 - $499 in the USA. But as Intel-based "Classmate PCs" begin to emerge, either Asustek will have to cut its sales estimates, or makers of higher-end machines will have to reconsider their expectations due to the fact that low-cost personal computers will occupy a larger market share compared to today. On the other hand, customers may not start to buy technology that is outdated and cannot fulfill their current needs. In that situation PC makers will find themselves with inventory that is completely irrelevant for particular regions.