A company is now selling what it calls the "world's cheapest laptop," which at US$130, is not a bad deal if you can bear some hardware limitations.

The Impulse NPX-9000 laptop has a 7-inch screen and comes with the Linux OS. It has a 400MHz processor, 128M bytes of RAM, 1G byte of flash storage and an optional wireless networking dongle. It includes office productivity software, a Web browser and multimedia software.

There's a caveat though -- it has to bought in bulk, in units of 100. The laptop is available on Alibaba.com through the online store of Taiwanese company Carapelli Ltd.

The cheapest laptop to date was known to be One Laptop Per Child's XO laptop, available at US$188 for a limited time late last year. While a technological landmark, it had some hardware limitations like a slow processor and limited graphics capabilities.

The laptop hints towards a trend of lowering PC prices. Last week, a company called CherryPal introduced a US$249 mini-desktop, also running a 400MHz processor, with 256M bytes of RAM and 4G bytes of internal flash storage.

In a recent interview with the IDG News Service, former OLPC CTO Mary Lou Jepsen said she would bring out a US$75 laptop by 2010. Now running her own company, Pixel Qi, she cited the falling prices of RAM and components as a way to bring down laptop prices.

The low-cost laptop industry's poster child is Asustek Computer's Eee PC, which was introduced last year and sold 350,000 PCs in its first quarter. The cheapest Eee PC, for US$300, has an 800MHz Intel processor, 512M bytes of RAM and 2G bytes of flash storage.