Notebook PC makers are stretching the boundaries of light-weight and low-cost computing, rolling out ever slimmer tablet PCs and mass market models costing as little as $200 in their quest to find the next big thing.

Old school slab-like laptops could soon become a thing of the past, replaced by a new, more varied generation of slick designs, with equal diversity of features and prices.

Many of those, with bells flashing and whistles blowing, were on display this week at Computex, the world's No. 2 PC show, in Taiwan, maker of 80 percent of the world's laptops.

"Computer companies are really boosting their industrial design capabilities to gain more business," said JP Morgan analyst Alvin Kwock.

This year's Computex featured laptops ranging from traditional 12-14 inch widths to as svelte as 7 inches, and weighing as little as 2 pounds.

"Seven-inch PCs are the perfect size, it fits in my bag and it's still large enough for a full keyboard," said Jason Lin, a PC system product manager from California's PC Club.com, a U.S. computer firm, as he strolled the isles of the show.

Laptops -- computers small enough to fit comfortably on the lap -- have been the standard for portable computing for years. But improving technology is paving the way for more varied devices, such as handheld ultramobile PCs (UMPCs) so tiny they hardly seem like computers at all.

Smaller than traditional laptops and bigger than smartphones, new mobile devices perform most computing tricks and can play videos and games. With more powerful software and new processors added to extend battery life, such UMPCs could rewrite the portable computing story going forward, some believe.

Japan's Sony Corp. launched its UX UMPC last year equipped with Windows operating system, an integrated webcam and a fingerprint sensor.

Asustek Computer Inc. has its own UMPC, which contains all the functions of a laptop, a handwriting board and GPS. It also allows users to take pictures with cameras and transfer files wirelessly with Bluetooth.

LOWER PRICES

While most notebook sellers are working to make their products smaller and more portable, many are also trying to shrink their prices to reach out to first-time buyers in developing markets.

Acer, which recently passed China's Lenovo to become the world's third largest PC seller, showed lower-cost laptops costing just about $500 at the show.

But the product attracting some of the biggest crowds was a new 7-inch laptop retailing for $199-$299 at Asustek's booth.

The model, built with Intel Corp. (INTC) chips, is the first at such a price point aimed at mass consumers in both developing and developed countries.

"This is the computer for a U.S. consumer who only wants to spend $200 on a second notebook, and it's also a product for a consumer from India who can only afford to spend $200 on a PC," Asustek's Vice President Raymond Chen told Reuters.

The company will launch the model in July or August, and hopes to sell an ambitious 200,000 by the end of the year.

Intel and others, most notably the One Laptop Per Child Foundation (OLPC), have worked with manufacturers over the last few years to develop low-priced laptops for the developing world.

But those programs have been targeted at governments, which can buy in bulk thereby cutting out costly middlemen. Asustek, by comparison, will sell its model through conventional channels like stores.

"It has all the features you would need at a very attractive price," said an impressed Lin of PC Club.com.

Industry analysts were also buzzing about the product.

"This is the only surprise at this year's Computex," said Kirk Yang, Citigroup's managing director and head of technology research.

"Its a breakthrough product cheap enough and targeting a new consumer segment -- its the main driving force for the new $2 billion PC market," said Yang.