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The Alpha 680 will have a 7-in. LCD screen at 800 by 480 pixels, 128MB of DDR2 RAM (expandable to 256 MB) and a 1GB solid-state disk (SSD) drive (expandable to 4 GB, though users can also add storage through the SD card or two USB ports). It will also have built-in Wi-Fi, keyboard and touch pad.

These bare-bones specs are what will enable the Alpha 680 to hit a $250 price, said Wu.

That's more than the $200 price talked up by ARM but less than the $300-to-$500 price of most Atom netbooks running Windows XP.

As volume ramps up, "I hope we can make it even lower," Wu said.

On the downside, the Alpha 680 won't ship installed with many local applications, though users can easily buy and download apps from the Android Market. Wu acknowledged, however, that up to 20% of Android apps don't yet run on the Alpha 680 because of compatibility issues that still need to be ironed out.

The Alpha 680's 2-cell battery will last between two and four hours while surfing the Web using its built-in Wi-Fi or optional 3G antenna, Wu said. That is far less than the eight- to 12-hour battery life that ARM has talked up.

How low can you go?

A longtime engineer in the satellite industry, Wu, a 50-year-old Hong Kong native, co-founded Skytone in 2005 with another partner. Contrary to some reports, Skytone is unrelated to a similarly-named maker of Skype telephone handsets.

The company didn't have a firm direction until an encounter with U.S. retailing giant Wal-Mart Stores Inc. in 2006 turned it toward the low-cost PC market.

"They were looking for ways to build a $100 PC. We had expertise in porting Linux to embedded systems, and so they found us," Wu said. "At the end of the day, we couldn't meet Wal-Mart's target, but we continued on this path anyway."

That resulted in Skytone's first product last year, the $180 Alpha 400. Prior sub-$200 PCs were desktops that reached that price by not including a monitor. The Alpha 400 was the first mobile computer for under $200.

Reviewers in the U.S. lambasted the Alpha 400's slow 400-MHz MIPS-like processor and overall build quality.

Skytone still shipped more than 100,000 units of the Alpha 400 last year, Wu said. Most were sold in Europe under brand names such as the Elonex ONEt.

Unburdened by expensive factories to run, most of Skytone's 50 employees are software developers recently graduated from colleges from across China.

They are feverishly working on a whole line of low-cost Linux computers complementing the Alpha 680, including the following:

• The Alpha 400P, the successor to last year's hit. It will have a faster 500-MHz MIPS processor. And like all of Skytone's other computers apart from the 680, it will run a version of Linux 2.6 customized by Skytone's developers and bundled with free Microsoft Office-like software.
• The Alpha 300 is a $99 net-top PC that is half the size of the 680 and meant to be connected to a television set. It also runs a MIPS processor, a low-cost, low-power chip similar to ARM. Wu envisions the Alpha 300 being used at home by users who would control the 300 with a TV remote control and use it to surf the Web during commercial breaks.
• The Alpha 700 is an 8.9-inch touch-screen tablet PC with 1,024-by-600 resolution, a 500-MHz MIPS processor, and 2GB SSD drive that will cost between $200 and $250, says Wu. For cost reasons, the screen is not touch-controlled, so people must use a stylus.