It's not only notebooks that are shrinking. The demand for power-efficient desktops has led start-up Cherrypal to introduce a $240 desktop PC that is the size of a paperback and uses just two watts of power. It will be launched on Monday

The increasing popularity of energy-efficient, small notebooks, commonly referred as netbooks, is leaving the biggest PC companies - already facing falling profit margins  - perplexed and scared.

Taiwanese companies Asus and Everex have pioneered the small devices, meant for surfing websites and checking emails. The market is so tempting that it has coerced PC majors like Dell, Acer and Hewlett-Packard to take the plunge. HP recently announced its hybrid notebooks and netbooks, called Mini-note.

Industry analysts say that low-cost and power-efficient computing can also threaten biggies like Microsoft and Intel, who worked for years to create the market for high-power, function-based computing. X

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