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Mike Arrington of TechCrunch declared last year it was time to invent a $200 internet tablet using open source hardware and software.

The second prototype has been unveiled. It features a 12-inch touchscreen powered by a Via Nano processor, 1 GB of ram and a 4 GB flash drive. It runs a browser and nothing else on top of a custom Linux build. The device also has wifi, an accelerometer (so when you turn the screen on its side you can view more of a web page), a camera and a four cell battery.

Resolution is 1024×768, allowing most websites to be viewed in full width. But the cost has sneaked up to $300. Still, it’s a remarkable achievement. Developers built the working prototype virtually out of thin air.

Viliv, like dozens of other vendors, displayed its X70 Atom Communication MID at CES (above). The handheld features a 1.33GHz Atom Z520 CPU, a 7-inch WSVGA touchscreen, 30GB/60GB hard drive or an 8GB/16GB SSD, Windows XP or Linux, 1GB of RAM, WiFi, Bluetooth, SDHC slot, optional WiMAX/HSDPA modules, USB port and a built-in microphone. But it won’t come cheap.

With the open source Android from Open Handset Alliance now running on $350 Netbooks, a $300 internet tablet doesn’t seem like a stretch.

Consider the $149 GiiNii Movit Mini, an Android Tablet (left) with a 4.3″ touch screen, MicroSD, WiFi, mic and camera. Run 700 MHz or “whitespaces” up that flagpole. It’s a free country.

In-Stat forecasts that in three years, Android will be in 97 million to 164 million handsets, while competitor Symbian will sell about 150 million units — in other words, a neck-and-neck market. But, “Symbian, from our perspective, is probably not the platform of choice for smartphones going forward,” says Jim McGregor, chief technology strategist at In-Stat.

Chip designers/vendors in the OHA include Qualcomm, Texas Instruments, Intel, Broadcom, ARM, Marvell and Invidia, among others. Software companies include Google, eBay, Nuance and PacketVideo, among others.

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