Officials won't reveal details, yet, but they are showing a prototype of a device they've created to spur development ideas. The tiny handheld (shown in the main pic below) reminded us more of a UMPC than a notebook, with the keyboard ditched in favour of a touchscreen keyboard.

We're told the device runs Vista, and Intel's Atom processor, and in our brief hand-on play, it ran relatively smoothly, though it was a bit awkward with the virtual keyboard taking up two-thirds of the screen.

The 5.6inch screen prototype has a motherboard half the size of the motherboard on the Portege R500 notebook. Onboard is a 64GB solid state drive, and GPS. Toshiba also said they have found a way to make antennas follow a curved surface.

"We don't think this [prototype] is commercially viable, it's too small," said Toshiba's Mark Whittard. "Having said that, we will have a ULPC soon."

Among the possibilities is a 9inch screen device, but Toshiba won't necessarily be bringing out an Eee PC rival, with officials identifying "six or seven" possible segments.

"We've been sitting back and looking at the marketplace," said Whittard.

Toshiba may have a point. Since the launch of the Eee, notebook prices have fallen to the point where it's possible to buy a 15.4inch Windows machine with a better spec for the same price, or less, than a netbook like the Eee PC.

With price no longer an advantage in the ultra low-cost notebook space, Whittard said Toshiba is looking for other ways to stand out from the crowd - hence the prototype.

via pcauthority