OLPC and Intel Collaborate on Laptop for Developing Countries

As it moves toward beginning full-scale production of the XO (also known as the $100 Laptop) in October, the One Laptop Per Child Foundation has increased the price of its laptop from previous estimates to approximately $188 per laptop. In addition, the non-profit has announced a “Give 1 Get 1” program allowing the public to donate $399 that will enable the foundation to give a laptop to a child in the developing world. The foundation will give donors a laptop in consideration for their donation.

The price of the laptop increased from previous estimates of $177 to $188 per laptop, OLPC spokesperson George Snell told Reuters in mid-September. Walter R. Bender SM ’80, president of OLPC Software and Content, said that “since we’ve never sold any, I wouldn’t characterize it as a price increase.” “We will always sell the laptop at price equals cost,” Bender said. Snell told CNN in September that the increase was a result of currency fluctuations and rising costs of components.

Mass production of the XO, which is being produced by Taiwanese laptop giant Quanta Computer Inc., will start “sometime in the last week or so of October,” Bender said. Previous delays resulted because laptop software and hardware were not ready. Because production is finally starting, Bender said he expects the laptop only to decrease in price after production begins.

OLPC has been tight-lipped about the countries that have signed as initial customers. “Until we were in production, we couldn’t sign agreements, but we are doing that now,” Bender said. He said he was “not at liberty” to release the names of the OLPC’s initial customers, but he did say that “there are confirmed places.”

However, OLPC might have a hard time actually selling the laptops to countries that made commitments. Nicholas P. Negroponte ’66, founder and chairman of OLPC, said recently to the International Herald Tribune, “I have to some degree underestimated the difference between shaking the hand of a head of state and having a check written,” adding that “it has been a disappointment.”

OLPC announced a program called “Give 1 Get 1” in late September. Under the program, the public may donate $399 to the foundation, receiving a laptop in return for their gift. The program will run from Nov. 12 to Nov. 26, Bender said.

“We are going to give them to the Least Developed Countries,” although OLPC is not sure which specific countries would be receiving the donated laptops, Bender said. “Least Developed Country” is a United Nations designation for countries based on criteria of low income, human resource weakness, and economic vulnerability, according the U.N. Web site.

OLPC does not know how many laptops will be donated in the program, Bender said. The opportunity for consumers to purchase the laptop was limited to a window of two weeks because OLPC did not want to oversell the laptop, he said. “We don’t want to divert the production from kids who need it.” Initially, OLPC would produce around 40,000 machines in its first month of production to ensure that bugs are worked out and would then scale up the production to full capacity, Bender said.

Over the summer, Intel joined the OLPC board on July 13 after Negroponte remarked that Intel’s XO alternative, the Classmate PC, prevented OLPC from attaining necessary orders to begin production. “Intel has hurt the mission enormously,” Negroponte said on a “60 Minutes” feature that aired on May 20. William A. Swope SM ’76, general manager of Intel’s Corporate Affairs Group and architect of the deal, said that “from any perspective, it would be impossible to ignore the timing” of the deal.

The agreement is intended to increase the cooperation between Intel and OLPC in building laptops for emerging markets, Swope said. Although it was agreed that Intel would be making servers for the XO, Swope said that the agreement has not changed Intel’s commitment to the Classmate PC. The Allama Iqbal Open University in Pakistan has already committed to purchase 700,000 Classmate PCs by 2009, said Agnes Kwan, Intel spokesperson. “We do not sell the Classmate PC below cost,” Swope said.

Intel is preparing a proposal to put Intel chips in the next version of the OLPC’s XO laptop, Swope said. Intel will compete with other manufacturers for the contract, he said.

Although the Intel-OLPC agreement has not changed the competition between XO and Classmate PC in emerging markets, Negroponte has stopped accusations towards Intel. Bender refused to comment about the previous accusations.

It has become increasingly clear, however, that competition for the XO will only increase. Swope said that “there will be at least five companies” competing to sell low-cost laptops in emerging markets.

The rising competition is “a great endorsement to the idea of OLPC,” Bender said. “We’re not in the laptop business, we’re in the learning business.”