Lenovo is joining the ranks of hardware builders making a run at the fledgling netbook market with a new ultra-small laptop.

The company on Monday unveiled the IdeaPad S10 netbook PC that runs Intel's Atom processor and Microsoft Windows XP. Available in two configurations, the small-form-factor, ultra-portable computer has a 10.2-in. screen, two USB ports, a 4-in-1 multi-card reader, WiFi connectivity and an Express Card slot.

Slated to be available in September, the new netbook has a starting price of AUD$699.

A netbook is a relatively inexpensive, small form-factor laptop that is designed for basic applications like Web surfing, e-mail and writing. It's designed to use less power than its traditional counterparts but isn't powerful enough for serious power users or gamers.

Intel announced earlier this year that it was betting heavily on the new market. In early June, the company unveiled two new Atom processors during the Computex trade show in Taiwan. Intel began shipping Atom chips for mobile Internet devices, which are small pocketable machines, in April.

Chris Tulley, a spokesman for Intel, said at the time that Intel expects netbook and net-top sales to outpace growth of traditional laptops and desktops.

Early in June, Acer dove into the mini-laptop market with the Aspire one, which is designed to use Intel's Atom N270 chip. Acer's netbook, which comes with 512MB or 1GB of RAM, runs either the Linpus Linux Lite operating system or Windows XP Home OS. It also comes with built-in 802.11b/g Wi-Fi.