Micrsoft and Intel killing OLPC

Submitted by bleckb on November 24, 2007 - 12:52.

The Wall Street Journal today, November 24, has a great report on the way in which One Laptop Per Child (OLPC) is faltering, in large part due to the efforts, official and backchannel, of Microsoft and Intel. Intel has launched it's own cheap laptop, called Classmate, fostering direct competition, even after the signing of a nondisparagment agreement. MS, as you might expect, has badmouthed OLPC from the top, Bill Gates, all according to the WSJ.

The long and short is OLPC is on the ropes because Intel fears AMD, the OLPC chip might set the standard in the developing world. Microsoft is making software available for $3, yes, three dollars, in the developing world to combat the scourge of anything not-Microsoft. Nations orignally slated to buy the OLPC machines are balking due to fears of no tech support. The irony is the buyers want support when it seems OLPC is about developing support among the users. You'd think the third world would be reticent to become more reliant on first world capitalists, but that doesn't seem to be the case.

You have to pay to read WSJ online, so a trip t the store for today's edition is worth the trouble. It's a long, in-depth story, the sort people fear will disappear under the Murdoch ownership. If there are any spelling errors, it's becuase I'm using an old version of Explorer on my father's computer. Really.

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Here's the story

Submitted by dug on November 24, 2007 - 15:22.

http://online.wsj.com/article/SB119586754115002717.html?mod=googlenews_w...

Yeah this story makes Negroponte look incredibly incompetent as head of the OLPC project. My reactions are here:
http://edtechdev.blogspot.com/2007/11/little-laptop-with-big-ambitions.h...

1. The story never even mentions the Eee PC 701 laptop, which is selling like hotcakes (more on that below). The article only mentions at one point "a low-cost laptop made by Asustek Computer" (who are the manufacturers of the Eee PC). Unlike the OLPC laptop (until this past week) or Classmate PC (another low cost laptop project from Intel), anyone can buy an Eee PC. It was the #1 selling computer on Amazon up until Amazon ran out of stock recently.

2. The story makes Nicholas Negroponte look really incompetent as head of the OLPC project. After his highly public complaints about Intel's Classmate PC laptop in May on 60 minutes, Intel and OLPC seemingly made up and Intel is even on the OLPC board now. But as recently as this month, Negroponte "communicated this month with Intel...and demanded that Intel stop selling the Classmate." That seems in conflict with Negroponte's claim that "OLPC is not in the laptop business. It's in the education business." Negroponte apparently denies access to the OLPC laptop for testing if it is to be compared head to head with another laptop (like the Classmate). The Eee PC, for example, has around twice the specs as the OLPC laptop with regards to processing speed, flash drive space, and RAM. Negroponte also doesn't seem to have a plan or response to those developing countries who want a laptop + some support for things like bugs fixes (OLPC has its own unique operating system) and laptop repair. The cost of the OLPC laptop keeps rising, from $100 to $188, and at the moment individuals have to pay $400 ('give one get one'). Also the OLPC project has over $9 million cash on hand from donations, but it doesn't appear they are using it to purchase and distribute thousands of laptops that amount of money could buy. Negroponte also seems to keep overstating the projected sales figures of the OLPC laptop. He claimed 6 months ago 3-5 million OLPC laptops would sell in 2007, and 150 million in 2008, and he even now is still predicting they will be making 1 million laptops a month next year. More on the actual sales numbers below. Right now, Quanta is producing a one time order of 300,000 OLPC laptops. And as I show below, that number seems to be the reason for OLPC's recent extension of the 2 week 'buy one give one' program.

3. A month ago, an Eee PC 701 laptop was selling every 6 seconds. That's over 14,000 laptops a day. The OLPC laptop sold 45,000 laptops in its first nine days, with nearly half being sold on the first day. That means it is selling less than 3000 a day. Since 300,000 laptops are already being manufactured, perhaps that is why the OLPC project extended the selling window to December 31st, which would get them over the 100,000 laptops sold mark at least. The nice thing is that means 100,000 laptops will be given away, as well. The first 20,000 are going to Rwanda, but they too questioned who would fix them if they break - a question Negroponte finds "frightening."

I'm definitely biased

Submitted by cel4145 on November 24, 2007 - 20:42.

I'm definitely biased since I'm anxiously awaiting my Eee PC 's arrival via FedEx Ground. But you are right. WSJ missed the significance of the Eee PC completely. In fact, I would argue that so have Negroponte and Intel. While the educational mission of the OLPC and Classmate PC is laudable, Asus seems to have better predicted that the real market potential for lower cost UMPC's is the regular consumer market.

An interesting indication of this is in one of threads over at EeeUser forum which talks about how people are drawn to the Eee PC when it appears in public. Computer users seem ready for a very portable laptop for carrying everywhere (I know I am). I also suspect that once the word is out about who Asus is that sales should continue to increase even more. Most people don't know that they are one of the top computer hardware manufacturers in the world and actually make components used by the mainstream desktop and laptop vendors. I've been using Asus components to build my own computers for years.

And in the instance of the Eee PC, Asus deserves great credit for taking this product from concept to production within a year. It's doubtful that the major computer manufacturers such as Dell, HP, Toshiba, etc. could have done that.

BTW: It's worth noting that part of the success of the Eee PC is the customized version of Linux; people seem to find it very easy to use. Every year there are claims in the Linux community that this year will be the Year of Linux on the Desktop. Ironically, Linux may end up gaining its mainstream acceptance by typical computer users through the laptop instead :-)

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Charlie | cyberdash

thinking xmas present?

Submitted by bleckb on November 24, 2007 - 22:38.

Having read that thread, I find myself wanting one, as I sit here with my monstrous dell (17" monitor) on my lap. Still, O wonder what this will do to OLPC? Will MS attack it for having linux and scare folks off that way? It's cool that we can by a $400 laptop, but what about those kids in the Amazon OLPC is supposed to save? Should we just forget about it?

On the other hand, I'm thinking I can sure stock a classroom with these puppies pretty cheaply. Maybe even write a grant to give them to students to see how having their own computer affects their studies?

bradley || bleckblog.org

kids in the amazon

Submitted by cel4145 on November 25, 2007 - 12:22.

While more of a trickle down effect, but it may indeed be that the end result is that the Eee PC could have more benefit for those kids in the Amazon in the long run than the OLPC marketing and production model.

Early on, Asus announced that the 2GB flash drive model would(could) be available for government purchase. I would guess that they might/could produce that version at a lower cost than $399 for very large orders, which is the same principle as OLPC and Classmate PC. Of course, they aren't actively marketing it to governments as an educational tool in the same way that Negroponte and Intel are.

High enough consumer sales will create the economies of scale that Negroponte has wanted to reach the cheaper price. If the Eee PC does take off in mainstream technology consumer culture, Asus will be able to manufacture them more cheaply. Then there is the competition within the market. Endgaget claims that Dell dropped the price on one of their laptops to compete with the Eee PC. If the Eee PC sales continue to increase, we should expect to see other vendors jumping into the market with either (a) better (performance or features) $399 UMPC's or (b) cheaper ones with the same features.

Now suppose OLPC had made a deal with Amazon and BestBuy in lots of 100,000 for $200 a piece for this holiday season. Great Xmas gift for children for middle class America. This would have gotten the OLPC out into western culture possibly creating a demand where they could have made similar deals with educational hardware vendors. This is probably the strategy to reach the economies of scale that OLPC needed. Moreover, if the OLPC was popular in developed countries, third world nations would be more likely to adopt it. It's no longer perceived as a second class machine.

BTW: I'm thinking of selling my current HP laptop once the Eee PC gets here. I just don't need both since I have a primary desktop at home. I'll let you know how I like it. Then it's an easier Xmas present to yourself if you can get some of your money back by getting rid of your current laptop :-)

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Charlie | cyberdash

economies of scale

Submitted by bleckb on November 25, 2007 - 18:45.

I just glimpsed a Best Buy flyer for a Toshiba with a 15.4" screen. Price, $399 after $150 mail-in rebate. It comes with 512 mb ddr2 memory and an 80 gig hard drive, but the ability to write dvd's and cd's. The processor is a celeron M but I don't know what speed since the ad doesn't list it.

bradley || bleckblog.org