Mini-computers that are smaller than a laptop but larger than a mobile phone are shaping up to be the gift of choice for gadget-lovers this Christmas.

Restrained by the credit crunch and liberated by the burgeoning number of wi-fi hotspots around the country, well-connected consumers are expected to ask for one of the many pared-down computers known as "mobile internet devices" (MIDs).

As many as 30 of the gadgets are expected to hit the shelves in the next couple of months, according to one supplier, and chip manufacturers have set about wooing the makers of such goods with next-generation micro-processors that will bring the internet to a smaller screen.

Products such as Apple's iPod Touch and Nokia's N810 have shown the popularity of smaller devices that connect to the internet wirelessly, as have low-cost laptops such as the Asus Eee PC, which sells for £210 in the UK.

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But manufacturers such as Intel, which have traditionally produced chips for PCs, are now joining the rush to the mobile internet device market. This is expected to accelerate the production of devices with screens big enough for comfortable web browsing.

The average cost paid for a laptop in the UK last year was £477, according to the retail analyst GfK.

This week in Taiwan, Intel will be showing off machines powered by its new Atom chip, which will have a battery life of four to six hours. An executive in the company's ultra-mobility group said this week that by 2010, Intel will produce another chip that will use one tenth of the power and allow for much longer gaps between charges.

Nvidia, meanwhile - which has traditionally made graphics processors - has been touting a new chip which it says will give 26 hours of high-definition video playback on a single charge. The new chip, known as Tegra, combines Nvidia's graphics technology with other components, including an application processor designed by ARM, the British company.

Qualcomm, which makes chips that enable high-speed transfer of data over mobile networks, has said it estimates that as many as 15 mobile internet devices are being developed using its technology. Texas Instruments, the Dallas-based chip manufacturer, has meanwhile set up a new unit dedicated to the MID market, and estimates that its processors have been selected for as many as 40 small devices.

Paul Otellini, the chief executive of Intel, told The New York Times this week that the challenge for traditional chip companies such as his was "how fast (they) can shrink down to smaller form factors" at the same time as retaining computing performance and full internet connectivity.

Mr Otellini said that the makers of small, internet-capable devices - for example Nokia - typically did not have access to the most advanced micro-processing technology. Nokia and its competitor Samsung have both licensed chip technology from ARM.

Intel has already said it wants to make its low-cost Classmate PC - originally designed for poor children in the developing world - available in the West for as little as £250. Asustek will this week demonstrate a model of its popular Eee PC with a wider, 8.9-inch screen.

Some analysts are sceptical about the prospects for mobile internet devices, however, saying that semi-conductors are not yet sufficiently advanced to deliver performance comparable to that of a laptop on a device with a smaller screen.

"There's clearly a category of intermediate devices that can be developed, but they depend on three criteria - computing performance, cost, and battery life - being met, and frankly we're not there yet," Brian Gammage, an analyst at Gartner, said.

Mr Gartner added that pocket-sized computers were already popular, citing sat-nav devices, but said they were only able to be so small because of the reduced number of functions.

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