Can HP's new ULPC compete?

I just might be buying a bunch of these...this is a repost while I'm on vacation, but I'd appreciated any new feedback now that these have been in the wild for a bit. Tell us what you think of them.

HP announced today that it would begin marketing a new inexpensive thin and light laptop targeting the educational markets in developed countries. The Mercury News also noted that the 2 1/2 pound aluminum notebook with a 92% of full-size keyboard could be a hit with executives and small businesses as well.

Interestingly, the article also highlighted a common misconception about open source software (the laptop will run SUSE Linux Enterprise Edition, as well as Vista Business, Home Basic, XP Pro, and FreeDOS). According to the article,

And the Mini-Note's price doesn't include software that buyers will probably want on it, such as word processing, spreadsheet or photo- and video-editing programs.

Of course, SUSE Linux includes OpenOffice and extensive repositories of software for photo and video editing, among countless other applications (not that the 1.6GHz Via processor is up to the task of serious video editing).

Misconceptions aside, the real question is, does the $499 base price qualify this machine as a ULPC (ultra low-cost PC) and will it be able to compete with upcoming versions of Intel's Classmate that should hit the market later this year at a much lower price point?

While the laptop certainly looks compelling in its own right, the cost certainly puts it in the class of expensive toy/useful business ultra-light rather than in direct competition with less expensive models. On the other hand, this may be the type of machine to which middle schoolers familiar with Classmates and other ULPCs upgrade when they hit high school and college.

What do you think?

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