Intel has unveiled the first prototype of a notebook computer featuring its new low-power Pentium III processor.

"(The processor) is in sampling to customers now and will launch in the first quarter of next year," said Donald MacDonald, director of mobile platform marketing at Intel.

The chip is currently being supplied in sample quantities to customers for evaluation and has been demonstrated in an IBM ThinkPad 240Z sub-notebook.

Until earlier this month, IBM had been planning to launch a ThinkPad 240 with Transmeta's low-power Crusoe processor but cancelled those plans.

At this week’s Comdex IT trade show in Las Vegas the company was playing its cards close to its chest. Fran O'Sullivan, general manager for mobile computing with IBM's personal systems group, said the company is still mulling the use of both the new Intel chip and Transmeta's processor in future products.

Users can switch the processor speed between either 500MHz or 300MHz using Intel's SpeedStep technology with the lower speed meaning less power consumption and greater battery life.

Benefits of the chip are most likely to be seen in smaller notebook computers, such as the sub-notebook in which it was demonstrated, because the screen is smaller and uses less power.

The processor may account for up to 25 percent of total power consumption and so battery life could be extended by about 30 minutes, MacDonald said.