Taiwanese laptop computer maker Micro-Star International is already hard at work on an ultra-low cost notebook PC based on Intel's Diamondville microprocessor to compete against rival Asustek Computer's Eee PC.

Asustek created the Eee PC laptop to sell in emerging markets such as India. It carries an Intel Celeron processor, weighs less than a kilogram, has a 7-inch LCD and can connect to the Internet wirelessly. The lowest-priced version costs NT$7,999 (US$248).

MSI is working on a similar device for the ultra-low cost notebook market, using an extremely low voltage, low cost microprocessor from Intel called Diamondville. Intel has said it will formally unveil the chip at the Intel Developer Forum in Shanghai this April.

"When Diamondville is ready, our project will be ready," said an MSI executive, speaking on condition of anonymity. He indicated that MSI plans to launch its ultra-low cost notebook in July or August, but declined to offer further details.

The IDG News Service is a Network World affiliate.