OLPC Chief Doesn't Like Having To Compete

from the price-war dept

Mon, May 21st 2007 12:48pm — Joseph Weisenthal

As Nicholas Negroponte's One Laptop Per Child program plods along with mixed success, the market continues to drive computer prices much lower. This past Christmas, Circuit City sold a $99 Compaq laptop (that required the customer to buy a one year subscription to Vonage), and it's inevitable that we'll see more deals like that going forward. But it looks like Negroponte would rather not deal with the competition. He recently lashed out at Intel for selling its own ultracheap computer, accusing the company of attempting to undermine OLPC by selling its computer for a loss. But it doesn't sound like there's a lot of merit to these claims. The biggest counterpoint is that Intel's computer costs more than OLPC's, which isn't what you'd expect from a company trying to undermine the program. As for a motivation, Negroponte believes that Intel wants to quash OLPC, because OLPC uses chips from rival AMD, but it's highly unlikely that Intel would sell its own chips at a loss just to prevent AMD from selling chips that can't be particularly profitable. Unlike, say, the rivalry between Microsoft and Linux, Intel doesn't have to worry about AMD chips taking hold and a whole generation growing up using them, since the network effects aren't the same. Seeing as the ultimate goal is to bring cheap computers and internet access to more people around the world, Negroponte should be glad that more companies and organizations are making this part of their mission.

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23 Comments

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Ajax 4Hire, 21 May 2007 @ 1:16pm

OLPC is a mis-guided attempt to
save the world.

For malaria, we give mosquito nets to people without beds.
Birth control classes to camps of starving refugees.
Laptops to children who are running from warlords in a war zone.

What good is a laptop to someone without food, clothing, shelter and safety?

If you want to save the world, start in your backyard.
Feed the people, House the people, Cloth the people.
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Josh Bernoff, 21 May 2007 @ 1:29pm

You're missing the point, competitively
Yeah, I saw 60 Minutes, too.

OLPC will go bye-bye unless it gets 3 million orders in the next month or so.

If Intel and Microsoft can convince enough of OLPC's potential partners (I don't say customers since they get the computers at cost with no profit to OLPC) to equivocate or cancel, they'll never have to deal with this platform. A few million AMD processors wouldn't really help Intel's claim of dominance right now.

That's why Intel is trying to stop this.
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American Capitalist, 21 May 2007 @ 1:29pm

$99
This past Christmas, Circuit City sold a $99 Compaq laptop (that required the customer to buy a one year subscription to Vonage), and it's inevitable that we'll see more deals like that going forward.
Hey, anybody want a new car for just $99? All you have to do is buy a "service contract" on it from me and the car is your's for just $99!
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Sanguine Dream, 21 May 2007 @ 1:40pm

LOL!!

Seeing as the ultimate goal is to bring cheap computers and internet access to more people around the world, Negroponte should be glad that more companies and organizations are making this part of their mission.

Who said that the ultimate goal is to bring affordable pcs and net access to those who otherwise would not get it? The goal is bring affordable pcs and net access to those who otherwise would not get it and get some good publicity.

That is why corporations these days will put $1 million into research and development and $50 million into marketing and public relations. Doing good is not as important as being seen these days.
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rEdEyEz, 21 May 2007 @ 1:55pm

Re: OLPC is a mis-guided attempt to "save the chil
hear, hear!

...and give them jobs at e-waste facilities, if they really are interested in computers.

Where is Habib going to plug in his charger/access WiFi, if he doesn't even have running water?
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Morgan, 21 May 2007 @ 2:23pm

Ironic
It's funny that Negroponte now bemoans the low-end competition, the lack of which he set out to fix. He's a turd and wants all the notoriety for himself, and he frankly doesn't give a rip if the users don't even have enough food to use their bodies to power the dynamo. So long as there are some good photo ops.

If anyone wants to really do something good, help get DDT to Africa over the enviro's protestations. There's a million lives lost to malaria a year to save, no sweat. Then start distributing Life Straws instead of laptops.
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Anonymous Coward, 21 May 2007 @ 2:28pm

but it's highly unlikely that Intel would sell its own chips at a loss just to prevent AMD from selling chips that can't be particularly profitable.

Hey Joe, every heard of a little company called WalMart? Get out from behind the computer headlines one day and see what it's like in the real world we live in.
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Greg, 21 May 2007 @ 2:30pm

I'm just going to go to Bhutan or wherever these are being used, and buy as many as I can from poor kids for like $50 USD, so they can eat for a couple of months.

Maybe leaving a pile of junk laptops on Negroponte's doorstep will convince him that this is a great but impractically Utopian idea.

I admire the man's vision, but I can't see these staying with the intended recipients for long, considering a) theft, and b) the temptation to sell them for food money or something.
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zcat, 21 May 2007 @ 3:04pm

I don't think the kids actually -own- the laptops.
Sue the kids get to take them home and perhaps even keep them after they 'graduate', but my understanding is that the laptops still belong to the schools and are just loaned out to students long-term, one-per-child. Any country that is concerned about them being sold or stolen can have security features enabled; the laptop will brick itself if it can't confirm periodically that it hasn't been stolen, and they've also been designed so that they're very hard to strip for parts.

And they're not being given to starving children living in cardboard boxes, they're being bought by countries that have food, housing and healthcare mostly under control. Education is the next step.
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Anonymous Coward, 21 May 2007 @ 3:17pm

Re:
cry cry cry cry
cry cry cry
walmart is cheap, god bless them, i love it.
loss leading is a respected busienss strategy, and the goal is always to destroy your competition.
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Justyn, 21 May 2007 @ 3:41pm

The problem isn't the competition
Negroponte doesn't have a problem with competition per se, remember that OLPC is a non-profit organization that aims to eventually put itself "out of business" by creating worthy competition.

But the problem is that Intel is at the moment selling the units at a loss. Realistically they will not do so indefinitely, and they will be able to put the price up if they can destroy OLPC.

The two projects have different goals when it comes to the rights of their intended users. OLPC hopes to set a standard of absolute freedom for the children and teachers who receive their machines, largely through using entirely open source software, which is free to be modified and redistributed forever.

Furthermore, the OLPC offering has been painstakingly crafted with education and creativity in mind, whatever the conditions in which it will be used.

Intel maintain that a generic PC with Windows is a better bet, and of course such a machine is a much more familiar device to those in authority who will decide what to buy. The same cannot be said of the intended recipients, who have in most cases never used a computer at all. A generic, Windows PC is certainly not well-suited to their educational and creative needs.
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Lawrence D'Oliveiro, 21 May 2007 @ 4:03pm

OLPC vs the rest
Frankly, I don't see what Negroponte is worried about. From what I've heard, the OLPC is a remarkable piece of work. A lot of effort has also gone into the Linux-based software to reduce its resource needs and power consumption.
This low resource usage is key to the whole project. Sure, you can run Dimdows on the OLPC, but it would be just painfully slow. The Intel machine would be more expensive not just because of the licensing cost for Dimdows, but also because it needs to be more powerful just to give the same level of performance.
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Anonymous Poster (profile), 21 May 2007 @ 4:08pm

You know, instead of spending all this money to get third-world people an electronic device they will, in all likelihood, not know how to use and never have a use for...how about buying them things like food and medical supplies?

Oh. Right. That would actually MAKE SENSE.
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dorpass, 21 May 2007 @ 4:49pm

Re: The problem isn't the competition
OLPC is product at a loss too, so what's the problem with Intel doing that?
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Brian, 21 May 2007 @ 5:07pm

They're poor, they're not starving...
To those who are saying things like, "why not give them FOOD instead...something they NEED!", try stepping outside of the country and see the world a bit. There are billions of people who are not starving, but just too poor to get a good education. The purpose of OLPC isn't to conquere world hunger, it's to help those in the developing world to get a better education. Computers encourage learning. Remember those old Apple II's in the classrooms back in the 80's? It's like that, but for those who are otherwise poverty stricken (in hopes that an education will change that).

As for Intel...I do think they are trying to undermine OLPC, but I'm not sure why.
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Stacey, 21 May 2007 @ 5:09pm

OLPC has its goal and good for them - every project has it's goal (or should have). Intel has their goal - as a business they should have, as well. I guess it's human to second-guess the motives of those who are contributing to a cause but in the end does it really matter if the customer gets what he/she wants or needs? And who am I to judge what these customers/users should be getting? I don't have the answers - I have more questions that answers, actually. I just tend to believe competition of any kind is good, regardless of the politics.
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Brian, 21 May 2007 @ 5:18pm

I think Intel sees this as an opportunity to squash any competition, even from a non-profit charity, before they have a chance to become competition. It's $100 laptops for children now...but that may lead to $200 desktops for teens...etc... Intel doesn't want OLPC to corner the market on computers in the developing world by basically giving them away at cost. They can put OLPC out of "business" (even though they are a charity) early and easily now.

Imagine if a charity began giving away gasoline at cost? Oil companies would find a way to squoosh that quick. Same scenario here.
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Richard Ericksion, 21 May 2007 @ 6:21pm

One Linux Laptop
Bonjour -

>Unlike, say, the rivalry between Microsoft and Linux, Intel doesn't have to worry about AMD chips taking hold and a whole generation growing up using them...

--Just read today that the OLPC machines are supposed to run on free Linux. Of course you can run Linux on PCs too - but 200 million kids learning about Linux must be causing some to think agai, even at Intel.
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slocan, 21 May 2007 @ 6:41pm

It's called dumping
... it's highly unlikely that Intel would sell its own chips at a loss just to prevent AMD from selling chips that can't be particularly profitable.

I don't think so.

The OLPC laptops will turn out to be the first computers in an awful lot of communities around the world.

They'll hear of processors for the first time. And it'll be an AMD processor.

And maybe they'll perceive their opportunity of using computers and having access to the Internet as an AMD effort, as it is an effort of other companies, institutions and individuals also.

The so called network effects may not be the same as that of software, but there certainly is an effect.

Such effect and the war of forming perceptions and point of views which is marketing, might well be motivation enough for Intel to practice dumping.
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slocan, 21 May 2007 @ 7:00pm

First they laugh at you, then they call you names,
[...] the market continues to drive computer prices much lower. [...]

The market itself is an abstraction. As is the mean and the median. But I digress.

My point is that, as I recall, the cheapest laptops (and I can be very much wrong) were around US$ 500.00, when the OLPC US$ 100.00 laptop announcement was made.

Then (and still now) there were plenty of attempts to ridicule the project and it's aim.

But suddenly and surprisingly similar attempts start sprouting "spontaneously".

So what was all that laughter and ridiculing about?

From the BBC article:

"Yes people laugh at it, then they criticise it, then they copy it."

Such pattern of behaviour and rhetoric signals to me that the competition is establishing their moves because of the OLPC project, not in spite of it.

And I gather the Negroponte isn't exactly bothered with competition but how competition chooses to be deceptive and hypocritical.
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rEdEyEz, 21 May 2007 @ 8:38pm

G_d bless the UN
Why doesn't Negroponte hand out $100 pc's to every illegal alien in the US, instead of undermining 3RD world economies? (avg income in India $14k)

Once again, the UN takes center stage as the most worthless entity on the face of the earth.

(...Intel more than likely could probably use some additional tax breaks...)
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lewis salem, 21 May 2007 @ 10:04pm

screw..
screw he laptop, drop rubbers from the sky.
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GoblinJuice, 22 May 2007 @ 11:49am

Just a thought!
Instead of giving Johnny (or whatever the equivalent name in Africa is - I'm pretty sure it's not Johnny) a laptop, how about we give him some clean drinking water? :-)

I mean, yeah, we all love pr0n and warez, but... clean water... wholesome food... and not having to worry about dying every time a mosquito bites you... sorta ranks higher in my book.

Just a thought!
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