Over the past few months, Intel has gotten into competition against the One Laptop Per Child (OLPC) organization .
In a nutshell, the OLPC people want to design and sell very cheap laptops for children in developing countries. Initially, the target price was $100, but for now, $175 looks more like it.
Initially, both AMD and Intel were interested in supplying the CPU for the project. After the OLPC people decided that their machine would be powered by an AMD Geode CPU rather than an Intel chip, Intel decided to cobble together its own cheapy laptop project and have come up with a product called Classmate PC.
Classmate PC is a more advanced laptop than the XO, and costs more, though there’s some signs Intel is offering some of these as a loss leader to get some early contracts.
Nor has Intel been shy about comparing the features of the two machines in its marketing presentations.
The OLPC people have taken great umbrage at this unexpected competition, and they’ve been bending every friendly media ear to get out the message, “How dare these evil people compete against us?” You can see a pretty snarky example from Fortune Magazine, and a less snarky one from 60 Minutes.
(If you want a more balanced view of this story as this develops, you could do a lot worse than read OLPCnews.com.)
A Few Numbers
The OLPC people think they can get production up to ten million units per month and unit costs down to $100 in two years. I personally think these are gross exaggerations, but let’s assume they can do that.
If they did, OLPC would have revenues of $12 billion dollars a year, which is twice the amount AMD is getting right now, and about 50% more than what a healthy AMD could reasonably expect in a year or two.
That’s a lot of money.
If you included the Geode sales as x86 sales, and assume that all XO sales were PC sales that otherwise wouldn’t occur, PC sales in 2009 would jump from around 280 million to 400 million, and AMD’s x86 marketshare would jump from the low 20ish percent to around 45%.
That’s a big change.
Given that the developing world is the next sales opportunity for PCs, you can see why Intel doesn’t want to roll over and play dead.
A Few Philosophies
To me, this is a classic confrontation between two very different worldviews.
We need not spend much time sketching out Intel’s worldview. Intel’s operating motto ought to be, “We rule.” They were one of the founding fathers of PCdom and have dominated the CPU market throughout. Now technical progress have begun to make very cheap PCs possible (and will do so even more in the next few years), which will open up very big new markets. Intel plans to dominate that market, too, and if they can do some good and make a few bucks doing that, all the better.
The underlying philosophy and design decisions of the Classmate PC is that of a cut-down, no-frills Western laptop operating in a more advanced environment than the XO. The machine is being sold as a device that will more comfortably run the software used by the advanced world.
Unless you consider “Intel Inside” an ideology, the Classmate is a commercial, not ideological device. It’s meant to run Windows, but hey, if you want Linux instead, that’s OK by Intel. Just buy the box.
In contrast, the XO seems to be designed for a less technology-friendly environment, and those building it seem to be carrying more than a little non-commercial ideological baggage, both economic and educational.
This is exemplified by the founder of the project, an MIT professor named something like thisNicholas Negroponte. This is a man who went straight from school to teaching; this is a man who’s lived in an ivory tower all his adult life. This is a man who now wants to test out his economic and educational theories and views throughout the world.
And it shows.
For instance, until very, very recently, the XO was to be a Linux-only machine. I don’t mean Linux would be the default OS, more like the OLPC people telling an MS interested in working with them, “Unless thou open-sources your software, Microsoft, it shalt not run on our machines.”
This is like telling the Pope you won’t become Catholic, he fixes up the Church’s sex rules, after considerable field research in a brothel.
Nor is humility much more evident in Negroponte’s dealings with governments. Basically, the guy says he can’t afford to handle trivial orders of tens of thousands like Intel can. No, he wants governments to commit to buy all their educational computers from OLPC, hundreds of thousands to a few million of XOs. Now.
Until very, very recently, the XO was not going to be sold commercially in developed countries, but, as Mr. Negroponte said at the end of the 60 Minutes interview, “He says it will be sold commercially in the future, but you’ll have to buy two: one for your child and one for a child in a poor country.”
Such forced charity doesn’t finish the “Earth to OLPC” kinds of comments made recently. If you read the Fortune and 60 Minute pieces, it’s quite evident that he wants to be more of a would-be monopolist than even Intel. This is his project, his baby, and he really doesn’t want to share.
Imagine someone from Intel saying something like this:
Q. We understand that Bill Gates and some others in this business have criticized this initiative as untenable. What is your response to this?
A. I don’t respond to such criticism. Because criticising this project is like criticising the church, or the Red Cross. We are a happy humanitarian organisation. We will work with anybody including Microsoft and Intel and others who have criticised us. It is actually shameless to criticise us, because the motivation is not to compete in the market place. The motivation is to change the way education happens by providing a different way of learning. So we don’t respond to criticism because always often, these criticisms are often wrong, including that of Bill Gates. Technically they didn’t look deep enough for what we were criticised for. In fact, what we were criticised for were not faults at all, they were our strength. Well, I don’t wanna get into a small nuclear war with Bill Gates, a great baron.
Hmmm. “My heart is pure, so I cannot be wrong, and cannot be bothered explaining why others are wrong.”
There’s more and worse, but we’ll talk about that later. For now, it’s safe to say that the biggest problem with OLPC aren’t technical weakness, but those of the founder.
This doesn’t make Intel good or even the default choice, though. An unbiased assessment of the two machines would conclude that Intel’s Classmate would be better in more advanced situations, and XO would be better for less developed areas.
However, the real issue dwarfing any differences in technical or design specs is whether any laptop is a good use of educational money, especially in the places and circumstances it is likely to be used.
We’ll talk about that tomorrow.