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This new category of PC, dubbed by OQO the ultra-personal PC, runs standard Windows XP software, unlike either of Microsoft's systems which require PC-incompatible binary code for applications and operating systems.
The IBM systems, which are believed to be experimental proof-of-concept PCs, will probably not appear until 2003 at the earliest but OQO appears to be ready to release its product in a matter of weeks.
The San Francisco firm demonstrated its product earlier this year and Giga research fellow Rob Enderle said this category of modular computer has proved to be a very popular concept in surveys among the analyst firm's clients.
"This is one concept that actually could transform the technology industry and ensure a more steady revenue stream preceded by unprecedented and, potentially, incredible growth," he added.
The 802.11b and Bluetooth wireless-enabled OQO device uses Transmeta's Crusoe chip backed by 256Mbytes memory and a 16Gbyte hard drive. Combining this with a colour VGA touchscreen, these specifications will run Microsoft's Windows XP Professional yet the device is slightly smaller than the HP iPaq Pocket PC.
The company has not announced a price but says it hopes to keep it down to about $1,000 (£650).