The first netbook running the Google's Android mobile operating system could be available within three months, costing about $250 (£170)

The Alpha 680, designed by Guangzhou Skytone Transmission Technologies, is going through final testing now, said Nixon Wu, Skytone's co-founder. The 50-employee company, located in the southern Chinese city in its name, is aiming to have final prototypes ready by June, with manufacturers likely to introduce models to the market one to two months after that, he said.

The Alpha 680 caused a flurry of excitement after it was spotted online earlier this week by Computerworld blogger Seth Weintraub.

Prototypes actually made their public debut at an electronics trade show in Hong Kong the week before."We've gotten 300 inquiries from different countries," Wu said.

The excitement surrounding a no-frills computer made by an unknown Chinese manufacturer is mostly due to the potential of the technology underlying it.

Used in billions of cellphones today, ARM processors are less expensive and more energy-efficient than even Intel's power-sipping Atom CPU. Android, meanwhile, is fast-emerging as a popular flavour of Linux for smartphones such as Google's G1, attracting interest from software developers as quickly as Apple's iPhone did.

Market experts predict that the combination of ARM and Android could help usher in an era of sub-$200 netbooks with 12-hour battery life and creative designs highly-tailored for different consumers.

It could also allow ARM/Android netbooks to wrest the netbook market from Intel's Atom chips and Microsoft's Windows XP operating system, which could weaken or break Microsoft and Intel's grip on the PC market.

The Alpha 680 will break new ground in portability. Prototypes weigh about 1.5 pounds and measure 8.5 inches long, 6 inches wide and 1.2 inches thick, said Wu - small enough to fit inside a small shoulder bag.

The Alpha 680 is using an ARM11 CPU running at 533 MHz. First introduced in 2002, the ARM11 chip, including later, more powerful versions, have been used in many different smartphones, including Apple Inc.'s iPhone and iPhone Touch devices.

Android performs fairly well on the chip, said Wu. YouTube's Flash-encoded videos, for instance, can play fine, he said.

The Alpha 680 will have a 7-inch LCD screen at 800 x 480 pixels, 128 MB of DDR2 RAM (expandable to 256 MB, a 1 GB solid-state disk drive (expandable to 4 GB), though users can also add storage through the SD card or two USB ports. It will also have built-in Wi-Fi, keyboard and touchpad.

These barebones specs are what will enable the Alpha 680 to hit a $250 price, said Wu. As volume ramps up, "I hope we can make it even lower," he added.

On the downside, the Alpha 680 won't ship installed with many local apps, though users can easily buy and download apps from the Android Market. Wu admitted, however, that up to 20 percent of Android apps don't yet run on the Alpha 680, due to compatibility issues that still need to be ironed out.

The Alpha 680's 2-cell battery will last between two and four hours while surfing the web using its built-in Wi-Fi or optional 3G antenna, Wu said. That is far less than the eight- to 12-hour battery life that ARM has talked up.

Besides Skytone, Taiwanese vendors such as Asus., Acer , and MSI have either confirmed or are rumoured to be working on netbooks or smartphones running Android, an ARM processor, or both.

HP has confirmed its interest in Android netbooks, while Dell is said to be interested in Android smartphones.

Though Skytone is likely to be overtaken by the bigger brands when they enter, Wu welcomes them anyway, saying it will grow the market and benefit consumers.

"We are a for-profit company trying to make a $100 device," he said. "The more vendors that come out, then the more affordable everyone's netbooks will get."