It comes with a 400 MHz MIPS processor, 1GB of flash memory, 128 MB SDRAM and a seven inch screen, similar to the first Asus EeePCs. It runs a Linux operating system and is offering a Wi-Fi USB dongle as an optional extra.
The laptop also comes with a VGA port to link the system to a full sized monitor and an SD card slot for moving files.
The news will come as a blow to the One Laptop Per Child campaign, which is currently $188 for its hardware.
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