Intel preparing rival for OLPC

The company said it would donate 700 to 800 of the $400 "Classmate PCs" to the government for a large evaluation in schools. Intel has already tested the computers on a smaller scale with students and teachers in a poor neighborhood of Campinas, near Sao Paulo.

Elber Mazaro, marketing director for Intel in Brazil, said this marked the first time the company had reached an agreement with any government for this kind of testing.

The deal to test the Classmate PC comes after President Luiz Inacio Lula da Silva last month received a prototype of a $150 laptop developed by the U.S. nonprofit group One Laptop Per Child, which began at the Massachusetts Institute of Technology's Media Lab. One Laptop Per Child expects to sell several million devices to governments in developing countries, beginning with Brazil, Nigeria, Libya, Argentina and Thailand.