Intel Corp. says its diminutive low-cost laptop will be evaluated in Brazil next year alongside a cheaper alternative from a nonprofit group seeking to bring computers to poor children worldwide.

The company said it would donate 700 to 800 of the $400 US "Classmate PCs" to the government for a large evaluation in schools. Intel has already tested the computers on a smaller scale with students and teachers in a poor neighborhood of Campinas, near Sao Paulo.

Elber Mazaro, marketing director for Intel in Brazil, said this marked the first time the company had reached an agreement with any government for this kind of testing.

The deal to test the Classmate PC comes after President Luiz Inacio Lula da Silva last month received a prototype of a $150 laptop developed by the U.S. nonprofit group One Laptop Per Child, which began at the Massachusetts Institute of Technology's Media Lab.

One Laptop Per Child expects to sell several million devices to governments in developing countries, beginning with Brazil, Nigeria, Libya, Argentina and Thailand.

Brazil has 187 million citizens, but tens of millions don't have access to a computer or the internet. Public schools offer little or no computer training, and some don't even have electricity.

The Brazilian government wants to bridge the divide, and Silva believes laptops for children will improve education.

Intel's laptop is about half the size of a traditional laptop, weighs 2.9 pounds, and has a seven-inch color screen. It has wireless internet capability and employs flash memory instead of a hard drive, but does not include a CD or DVD player.

It is not yet clear whether the laptops to be tested in the school will use Windows, Linux or a mix of the two, Mazaro said. Brazil's government favours Linux and other free open-source software in its programs to provide computers to the needy, because using Windows can drive up costs.

While the Intel laptop cost more than twice the price of the nonprofit organization's model, executives said prices would come down with mass production.

"The goal clearly is to make millions and millions of these," said John Davies, an Intel vice-president for sales and marketing.

The government plans to test the Intel laptop along side the One Laptop Per Child model and a third computer being offered by an Indian company, said Jose Aquino, a special assistant to Silva.

"We're going to put it in the classroom and see how it does," he said.

Davies said the price difference between the Intel laptop and the nonprofit group's model is actually narrower because One Laptop Per Child makes its product in China and does not factor shipping costs into the price. Intel has Brazilian manufacturers lined up to produce the computer.

But Walter Bender, the nonprofit group's president of content and software, points out it doesn't "cost $250 to ship a laptop from Shanghai to Sao Paulo."

Bender says his group welcomes the competition.

"The only way the price is going to continue to go down is competition in the marketplace," Bender said in a telephone interview from Cambridge, Mass. "One of our goals was to get industry to wake up to that need."