Cell phones, not laptops, hold the most promise for providing low-cost access to one-to-one computing in developing nations, according to Microsoft founder and chairman Bill Gates.

Gates’ decree, first published in the New York Times in January, came after Microsoft vice president and chief technology officer Craig Mundie told the newspaper both he and Gates are convinced that turning cell phones into computers by connecting the handheld devices to keyboards and television sets holds the most promise for the spread of one-to-one computing, especially in developing nations, where access to expensive hardware and software often is difficult.

The software maker’s idea comes in response to commotion generated over the recent unveiling and promotion of MIT Media Laboratory founder Nicholas Negroponte’s $100 laptop. The low-cost device, which features a hand crank, was introduced as a way to extend many of the benefits of one-to-one computing to the world’s poorest students.

But when Microsoft failed to reach an agreement with Negroponte to install its trademark Windows operating system on the machines–which will be distributed to students in developing countries as part of Negroponte’s One Laptop Per Child (OLPC) initiative–the Times reported that Gates and his engineers decided to pursue other alternatives. Negroponte, meanwhile, has been looking into the possibility of equipping his prototype machine to run on an open-source platform, the newspaper said.

At the World Economic Forum in Davos, Switzerland, on Jan. 28, Negroponte’s OLPC signed an agreement with the United Nations Development Programme (UNDP) to begin distributing the machines and other learning resources to schools in many third-world countries.

Negroponte already has said he plans to make and distribute millions of the small green machines to poor students in Brazil, Thailand, Egypt, and Nigeria. Through his partnership with UNDP, this distribution could extend to as many as 166 member countries, officials said.

Though a handful of U.S. governors have expressed interest in purchasing the machines on a statewide basis, educators will have to wait at least a year, maybe more, until the machines become available in the states.

“Though the price of access to knowledge has dramatically decreased in recent years, new technologies remain out of reach for most people in developing countries, especially children, who rarely have access to the educational resources that could enhance their opportunities and lift them out of poverty,” said Kemal Davis, administrator for the UNDP program.

Corporate interest in the project has been high. After reviewing several bids, OLPC announced in December that Quanta Computers would manufacture the laptop; and six companies–Google, AMD, Red Hat, News Corp., Nortel, and Brightstar–already have provided $2 million each to fund OLPC and the initial laptop design.

Negroponte said he expects the price of the laptops, which could exceed $100 initially, to come down over time. Manufacturing will begin when at least 5 million machines have been ordered and paid for in advance, and the preliminary target is to have units ready for shipment by early 2007.

“World demand and goodwill for the $100 laptop has been boundless, because any head of state realizes that a nation’s most precious natural resource is its children,” said Negroponte.

But Gates and his colleagues at Microsoft reportedly aren’t convinced that the $100 laptop is the answer schools have been waiting for.

“I love what Nick is trying to do,” Mundie reportedly told the Times. “We have a lot of concerns about the sustainability of his approach.”

Mundie, however, could not say when Microsoft would be able to provide further details of its cell phone-based approach. He said Microsoft already has developed prototypes for some consumer manufacturers.

Negroponte told the newspaper that researches at his MIT Media Lab also have experimented with the idea of offering one-to-one computing capabilities via cell phone. Ultimately, he said, the cell phone prototype, which would work by projecting an image from the phone onto a wall, for example, was deemed less practical than a laptop by MIT researchers.