Is it possible to build a $20 laptop?

The unveiling of the $20 laptop-the result of a major project involving the government, universities and the private sector in India-so far hasn't done much to clear up the mystery surrounding the ultra-inexpensive notebook. All we really know about the device is that it will have a low-power chip (it consumes about 2 watts), 2GB of memory, and Ethernet and WiFi connectivity.

Like the OLPC's XO laptop, the Sakshat laptop (translation: "before your eyes") has lofty goals. But several reports have raised the obvious question: Is it possible to build a laptop for that price?

Currently 1GB of memory would cost a manufacturer about $8.50, meaning the 2GB of memory alone would cost nearly as much as the entire device. The processor and chipset, display and battery are all costly components as well. Even the most basic netbook sells for about $300, and the XO laptop ended up costing nearly $200 (though the foundation is reportedly working on a XO2 that it says will cost around $75).

There are a few ways a device like this might be manufactured for less than $100.

First, it's possible the laptop doesn't have its own display. According to a local report, the government's Secretary of Higher Education, RP Agarwal, stated the Sakshat will have "the capability to project on a screen." The trouble with this theory is that the photo accompanying the story-the first I've seen that claims to show the laptop-clearly depicts an integrated display. The device looks like a cross between a netbook and a convertible tablet PC.

Second, it's possible that the laptop is more of an e-book reader than a full-fledged PC. Major textbook publishers have reportedly been working with the government to develop content for the device. Still the fact that it will have Ethernet and wireless indicates it would need many of the same hardware and software components as a netbook. After all, the Amazon Kindle with wireless and a basic keyboard sells for $359.

Third, it could actually use 2 gigabits--not 2 gigabytes--of memory. A laptop with 256MB of memory may sound implausible, but if it uses a lightweight, Linux-based operating system and only a handful of basic apps, it could be done. In fact, the minimum system requirements for Ubuntu 8.10, a full-featured Linux distribution, include 256MB of RAM. Even so, other components would still push the laptop well north of $20.

Finally, there's always the possibility that the government will heavily subsidize the device, which is part of a broader effort to reduce the digital divide between cities and rural areas in India. That would make sense, but most reports say it's not the case. Though it hasn't announced a manufacturing partner yet, the government promises to begin selling the device in about six months, so I guess we'll have to wait and see whether (and how) it can deliver.

Christopher Dawson has more coverage of the $20 laptop on his ZDNet Education blog.