Tales of super-low cost computers are in the news, reflecting falling prices for new consumer products in advanced countries as well as the multi-year One Laptop Per Child effort for the developing world. The Eee PC by Asus offers 512 megabytes of memory and four gigabytes of storage for $399. For the same price, the XO from One Laptop Per Child offers another Linux-based system for $400 in advanced economies, which pays for a donated computer for a child in a developing country.

What is the impact of falling prices? One clear indication of massive changes in the computer marketplace are the reactions by Intel and Microsoft at end-runs around them through AMD chips and Linux operating systems. Intel, which does not normally retail computers, introduced a special computer for developing countries called the Classmate. Microsoft, which typically charges hundreds of dollars for its software, is now offering poor countries a special US $3 bundle of Office and Windows.

Will falling prices mean an end run around the technology giants? Will low-cost machines on open systems allow for more specialized and unexpected uses? At what age do we want children to begin using computers?