The project One Laptop per Child, coordinated by Professor Nicholas Negroponte for the benefit of developing nations, represents a new challenge for Microsoft developers in their attempt to implement Windows XP on a computer initially designed for Linux software.

The involvement of Microsoft in this project could be a difficult one, as it highly depends on its sales and profits, and future developments of low-priced software could affect the sales of the pricier ones Microsoft holds on the market.

It was previously rumored that Steve Jobs offered to equip the laptops with a free copy of Mac OS X, but the foundation rejected Apple's offer on the grounds it did not want to accept proprietary software.

One of the challenges for Microsoft is that Windows, a hard - drive based software, has to be made compatible with the XO laptop, which currently is designed to use a semi-conductor based memory instead of a hard drive. At the same time, the current memory of the XO is 1 GB, while just for Windows and Office 2 GB should be available.

The "100$ notebook" or OLPC XO-1 is produced by Quanta Computers, who has a 33% market share of laptops world-wide. It contains an AMD LX-Geode CPU at 700 MHz and 256 MB of RAM. There is no hard disk, but a 1 GB flash memory. A dual-mode SVGA LCD screen (monochrome and color mode) helps saving power. It has a built-in wireless network interface and color camera. The XO has no moving parts, can be powered by solar, foot-pump or pull-string powered chargers, and is housed in a waterproof case. The laptop is sold only in batches of 250,000 units to governments.

According to WSJ, James Utzschneider, general manager of Microsoft's Unlimited Potential Group said the company would test the Windows-based XO laptops starting January 2008 in the U.S., India and possibly Romania.
Depending on the outcome of these trials, they could become available on the market as soon as the middle of 2008. Apart from the trial versions, Microsoft declared it does not intend to commercialize the product in North America.

An official announcement of the Windows XO release has not been made yet, as the developers wish to make a quality product before releasing it and making any commitments to any developing country. A Microsoft engineer posted on the Unlimited Potential Group blog: “We have not announced formal plans to support the XO yet, and we will do so until after we start getting feedback from our first limited free trials starting in January before we make the final call”.