Laptop maker Micro-Star International (MSI) is making progress with a tiny ultraportable to compete with Asustek's Eee PC, and has revealed that the system will be based on Intel's Diamondville processor.

Asus' Eee PC was regarded as one of the most innovative laptop launches of 2007, and the product has proven popular in emerging markets and among technology enthusiasts. It features an Intel Celeron processor, weighs less than 1kg, has a 7in LCD and can connect to the internet wirelessly. The lowest-priced version costs around £220 in the UK.

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MSI is working on a similar device for the ultra-low-cost notebook market, using the extremely low voltage Diamondville, which is expected to be unveiled by Intel at the Intel Developer Forum in Shanghai this April.

"When Diamondville is ready, our project will be ready," said an MSI executive, speaking on condition of anonymity. He indicated that MSI plans to launch its ultra-low cost notebook in July or August, but declined to offer further details.