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A £99 GNU/Linux laptop: is it just too cheap?

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On 28 February 2008, Elonex launched the Elonex ONE—the first sub-£100 laptop in the UK. Clearly competing against the much in-demand Asus EeePC [2], Elonex say they are aiming at the school-student market. The thing is, I just can’t stop asking: isn’t £99 too cheap for a laptop?