It was a claim that anyone with a reasonable amount of computing knowledge would have debunked under normal circumstances - a laptop for $10 or under Rs 500. You don't even get a decent memory stick for that price, or even the cheapest of mobiles!

But then, the announcement was made by no less a person than Rameshwar Pal Agrawal, secretary, Department of Higher Education of the Ministry of Human Resource Development.

Also, the government has been talking of low-cost computing devices for quite some time now - the prices of which would be much lower than former Media Lab's director Nicholas Negroponte's $188 XO laptops which are part of the One Laptop Per Child global project.

So, despite the disbelief and the 'Oh Yeah(s)?' on the Net, observers both in India and abroad keenly awaited the launch of the prototype in Tirupati, Andhra Pradesh. After all, nobody would want to risk pooh poohing a low-cost computing device which could effectively and eventually bridge the 'digital divide'. However, when the contraption was finally launched, it fell extremely short on expectations - some called it nothing short of a joke, even 'hoax'.

Was the criticism justified? Probably not, if one understands the context. A lot of work was put in by students of the Vellore Institute of Technology, scientists in Indian Institute of Science in Bangalore, the IIT-Madras and the involvement of PSUs like Semiconductor Complex Ltd.

The end product came with 2GB storage memory, Wi-Fi connectivity, ethernet port(s) and USB connectivity. But it did not have a screen. So if you wanted to display the data stored on it, you would need to attach a compatible output device using the USB ports. And the computing device called 'Sakshat' turned out to be 10 inches long and five inches wide and cost around $30. So it was still less than Rs 1,500.

Besides, the idea was noble. The Department of Higher Education of the Ministry of Human Resource Development has earmarked around Rs 4,600 crore (Rs 46 billion) to promote the use of Information and Communication Technology in teaching and learning processes.

Approximately 20,000 institutions of higher learning are expected to benefit from this. To achieve this objective, the government said it would support the development of low-cost and low-power consuming devices through field trials - one of these was 'Sakshat'.

But, then, why call it a laptop? This is probably the main reason for so much confusion. IDC India Lead Analyst (P C Research) Sumanta Mukherjee, says: "Should it be possible to provide a notebook at a customer price of Rs 500, the final impact on the PC market will depend on the functionality. While affordability is a key driver to enhancing PC penetration, it certainly is not the only one - relevance of the product, cheap and reliable broadband in deep interiors will also make a difference."

The success of a computing model, according to Diptarup Chakraborti, principal research analyst, Gartner India, revolves around a friendly operating system and application-ready device. "If these requirements are not fulfilled, users graduate to higher models very fast," he explains. Perhaps, he suggests, the nomenclature for such devices (referring to the Rs 500 laptop) should be changed.

There's much merit in this line of thinking. When one pictures a 'laptop', it creates expectations of a minimum configuration and form factor. History is a good teacher (anyone remembers the Simputer which did not take-off in India?). Muddled thinking should not result in diluting a noble cause.

The idea of an affordable laptop has existed in some form or the other since the 1960s, and Prof Seymour Papert of MIT's Media Lab developed the idea in 1985, in "The School of the Future". Perhaps, the first real answer to the challenge of low-cost computing for kids was the XO (which runs open-source Linux) from Negroponte, founder of the OLPC project.

The original target cost was $100, but this escalated (including shipping costs) due to design upgrades (more memory and a faster microprocessor) and also because the initial production volumes would not enjoy economies of scale.

The OLPC project was supported by companies that are arch rivals - Intel (which later pulled out) and AMD, besides Microsoft, Linux and Google; so perhaps the project was bound to run into rough weather.

Negroponte, it is alleged, asked the chipmaker to stop selling its Classmate PC while it was part of the OLPC. Intel reasoned it ought to support multiple platforms (not the XO alone). Also, there were differences over how the education market should be approached.

The Intel approach is to use school teachers and sell to schools rather than the government. Negroponte, on the other hand, is said to be favouring bypassing teachers, which is not a favoured approach in emerging economies. This is one of the reasons why the OLPC project received a cold shoulder from the Indian government too. The other reason could be that Negroponte was associated with the MIT Media Lab, Asia, with which the government had an unpleasant experience a few years ago.

To counter the OLPC, Intel introduced its Classmate PC for developing countries (including India), which costs between Rs 9,000-12,000, but was launched in India in July-August 2007 for Rs 18,000. The Classmate PC includes hardware, software and learning programmes. Intel teamed up with HCL Infosystems [Get Quote] (which offers both Microsoft and Linux) and Educomp to introduce the Classmate PC in India.

The OLPC Foundation, on its part, joined hands with Reliance Communications [Get Quote], which is running a pilot in a village called Khairat, near Karjat (in Maharashtra).

Indian and multinational PC makers like Asus, HCL Infosystems and Wipro [Get Quote] are also ready with Nettops (low-cost desktops), based on Intel Atom processors. AMD, on its part, says its Yukon platform does not compromise on performance while saving on power and keeping the laptops light in weight.

Another chip player, Freescale Semiconductor, announced this January that it would enter the netbook market with sub-$200 price points. It uses the i.MX processor based on ARM Cortex technology in association with Pegatron.

Incidentally, players like Chennai-based Novatium have partnered with MTNL [Get Quote] to offer cheap desktops at less than Rs 10,000 (including the service, monitors and so on). The desktop called netPC costs just Rs 4,999. Novatium offers a managed service which means that customers store data on the Novatium servers - a good option for small- and medium enterprises too. Over 7,000 netPCs have been sold to date.

Research firm IDC has predicted that the new market segment, comprising small, energy-efficient and low-cost devices (netbooks and nettops), could grow from fewer than 500,000 in 2007 to 9 million in 2012 as the market for second computers expands in developed economies.

Indeed, low-cost computing is here, but we need another name to accommodate form factors like that of 'Sakshat', failing which all of us - including the Indian government - will miss the wood for the trees.