Smaller PCs create jitters in industry

The personal computer industry is poised to sell tens of millions of small, energy-efficient Internet-centric devices.

But, in a tale of sales success breeding resentment, computer companies are wary of the new breed of computers because their low price could threaten PC makers' already thin profit margins.

The new computers, often called notebooks, have scant onboard memory. They use energy-sipping computer chips. They are intended largely for surfing Web sites and checking e-mail. The price is small too, with some selling for as little as $300.

The companies that pioneered the category were small too, like Asus and Everex, both of Taiwan
Despite their wariness of these slim machines, Dell and Acer, two of the biggest PC manufacturers, are not about to let the upstarts have this market to themselves. the world's biggest PC maker, recently sidled into the market with a hybrid of a notebook and notebook that it calls the Mini-Note.

A Silicon Valley start-up called CherryPal says it will it plans to introduce a $300 desktop PC today that is the size of a paperback and uses 2 watts of power compared with the 100 watts of some desktops. It wants to take advantage of the trend toward "cloud computing," in which data is managed and stored in distant servers, not on the actual machine

Industry analysts say that the emergence of this new class of low-cost, Internet-centric machines could threaten titans like Microsoft and Intel because the giants have built their companies on the notion that consumers want more power and functions built into their next computer

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