A nonprofit group that designs low-cost computers for poor children may start selling $350 laptops on the commercial market by Christmas, an executive said on Monday.

The One Laptop Per Child Foundation's chief technology officer, Mary Lou Jepsen, said the computer could sell initially for about $350, or twice its production cost, although the group is also considering a higher price tag.

Its entry to the commercial market would be a challenge to traditional PC industry companies, including Microsoft Corp., Dell Inc., Hewlett-Packard Co. and Lenovo Group Ltd.

The PC industry will be watching this very closely, said Roger Kay, an analyst with PC market researcher Endpoint Technologies Associates Inc.

Although the green-and-white XO was designed for elementary school children in poor countries, analysts say that some of the features make it attractive to kids in wealthier countries as well as adults.

The foundation has kept its costs down by developing its own technology, including the display, and using a relatively inexpensive microprocessor from Advanced Micro Devices Inc.

It also uses free Linux software, saving the cost of paying to use Microsoft's Windows operating system.

Designed to withstand severe weather common in areas of Asia, Africa and Latin America, it is waterproof and features a high-resolution display that can be read in direct sunlight. Its battery can run for 12 hours on one charge. The battery can also be charged with a hand-crank.

OLPC is in talks with several companies that would handle consumer sales and technical support for the foundation. Jepsen said that the group wants to sell the devices over the Internet and is talking to three companies with a big presence on the Web, but declined to identify them by name.

Foundation executives have previously said that they didn't intend to commercialize the product this year as they wanted to focus their energy on serving the educational market in developing countries.

But now they are evaluating whether it makes sense to quickly move into the commercial market, using profits from those sales toward the cost of making laptops for poor children, Jepsen said.

Our whole goal is to maximize the number of units shipped, she said.

She talked about plans for commercializing the product on Monday as the foundation said it has formally authorized mass production of the device to begin in October, with an original order of some 3 million machines.

The machines will be manufactured in China by Taiwan's Quanta Computer Inc.

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