Mumbai: Taiwan''''s Quanta Computer has started mass production of a low-cost laptop computer - a lime-green-and-white XO laptop computer - at a factory in Changshu, China.

The XO is designed for elementary school students who are given the machines to take to and from school, like textbooks.

Production of the new laptop computer for children in developing countries - a milestone that could shake up the PC industry by ushering in a new era of low-cost computing - had begun, the One Laptop per Child (OLPC) foundation, a non-profit group, said.

OLPC, started in 2005 by Massachusetts Institute of Technology professor Nicholas Negroponte, has already announced orders for children in Uruguay and Mongolia. It also plans to offer the laptops to Americans and Canadians through a $399 holiday charity programme that covers the cost of providing a second machine to a child overseas.

The new laptop, which runs on free Linux software, has raised concern that it might take business from commercial products and has prompted companies, including chipmaker Intel Corp and software maker Microsoft Corp, to boost investment in developing countries.

Negroponte has travelled around the world meeting leaders and talking to the public about speeding introduction of computers to children in the developing world.

The Classmate PC developed by Intel for the education market in developing countries, a laptop that it says costs $200 to build, is the cheapest available so far. Pakistan''''s Allama Iqbal Open University had ordered 700,000 of them.

Taiwan''''s Asustek Computer Inc recently introduced a line of notebook computers, the Eee PCs, that retail for as little as $245 in some countries and are targeted at children and women.