How a computer for the poor got stomped by tech giants 27 Nov 2007

The Wall Street Journal published an interesting article on the development of the One Laptop Per Child (OLPC) project on Saturday. It says that, despite all the pledges of support from world leaders and corporate benefactors, the initiative is failing...and badly:

"In 2005, Nicholas Negroponte unveiled an idea for bridging the technology divide between rich nations and the developing world. It was captivating in its utter simplicity: design a $100 laptop and, within four years, get it into the hands of up to 150 million of the world's poorest schoolchildren...

"...But nearly three years later, only about 2,000 students in pilot programs have received computers from the One Laptop project. An order from Uruguay for 100,000 machines appears to be the only solid deal to date with a country, although Mr. Negroponte says he's on the verge of sealing an order from Peru for 250,000. The first mass-production run, which began this month in China, is for 300,000 laptops, tens of thousands of which are slated to go to U.S. consumers. Mr. Negroponte's goal of 150 million users by the end of 2008 looks unattainable."

So what's gone wrong? Well, the WSJ points to several factors. Firstly, the spiralling cost of the machine has put off a number of previously-enthusiastic countries. Nigeria, for example, has so far failed to honour a pledge made by its former president to purchase one million laptops due to a series of regular price hikes. While the dream had been to sell the OLPC laptops for $100, by April of this year, the price had risen to $175. And at the time of writing, the price now stands at $188, plus shipping. This is quite understandably making poorer nations hesitant about submitting their orders.

Secondly, a number of potential buyers have expressed concern about the availability of training for schoolteachers, and after-sales support. While the OLPC team feels that its machines are simple enough for teachers (and students) to use without training - and that teachers should be able to solve any technical problems as they arise - the developing world has thus far responded to these claims with scepticism. This is, in no small measure, down to the fact that the OLPC's operating system is nothing like anything they have seen before - i.e. it isn't Microsoft Windows - so it therefore represents a whole new learning / retraining challenge. Read: a very costly endeavour.

Lastly - and perhaps most interestingly - the OLPC project has unwittingly incurred the wrath of Microsoft and chip maker Intel. Negroponte's decision to go with a Linux-based operating system and AMD chip threated to strip Microsoft and Intel of their dominance of the nascent IT industry in the developing world. A decision that caused Microsoft and Intel to respond with furious anger.

Intel - a company that normally doesn't sell computers - opted to introduce its own Windows-ready laptop for developing countries called the "Classmate", which is currently priced at between $230 and $300. It has marketed this computer aggressively in the face of the OLPC and is offering free computer training courses to schoolteachers to boot - even though it stands to make little money on the initiative. (It's only aim is to stop AMD encroaching on its territory). As a result, officials in Libya - a country that had previously planned to buy up to 1.2 million OLPC laptops - has now switched its order to Intel.

The high price tag has also has made the OLPC laptop vulnerable to competition from sellers of cheap Windows-installed machines based in Taiwan, India and Israel, who see the developing world's one billion potential customers as a massive opportunity.

Microsoft may have dealt the death blow to OLPC however, with the recent introduction of a $3 software package (Yes, $3!) that includes Windows, a student version of Microsoft Office and a series of educational programs. Libya and Egypt are finalising deals to buy this package en mass, while Russia has already signed an agreement to buy at least 200,000 copies, with an option to buy up to 800,000 more. The Russians, apparently, will load the software onto a low-cost laptop made by Asustek Computer Inc. of Taiwan, another OLPC competitor.

Seems like worrying times are ahead for Mr. Negroponte and co...