Intel has given its low-cost Classmate PC laptop a makeover at CES 2009, adding a touch screen and making the 8.9-inch display swivel 180 degrees and morph into a tablet PC.

Designed for students (sorry, Netbook fans), the Classmate PC is reportedly doing much better than OLPC's $100 laptop for developing markets, largely because Intel is farming out the manufacturing process to local OEMs. Intel scored its largest contract in Portugal thanks to the government's Magellan initiative, which aims to provide the laptops to all students in the country. Venezuela is working with Portugal to implement a similar program.

The new convertible design for the Classmate PC will be offered alongside the traditional model, and was developed in order to make the devices more flexible for use in a variety of classroom environments, Intel says. The chip maker's 1.6Ghz Atom processor powers the laptop, which additionally offers a rotating camera and water-resistant keyboard. In tablet mode, the software ignores a palm rested on the screen to make writing easier.

The system runs Windows XP with learning software from Intel and its local partners on top, and features a 60GB hard drive and 512MB of RAM.

Manufacturers have already signed on to make the convertible Classmate PC, including CTL, Equus and M&A in the United States, MDG in Canada, CMS in the United Kingdom, NEC in France, Olidata in Chile, ASI in Australia and Hanvon in China. In Portugal, Intel is working with JP Sá Couto to develop a revised Classmate PC with a larger screen, more memory for local content and even 3G and WiMAX connectivity.

So how much will these new tablet-capable Classmate PCs cost? Intel doesn't specify prices, since the contracts vary per country and order, but previous estimates ranged from $250 to $350.