How Many XO-1 Laptops Will OLPC Ship in 2007?

   
   
   
   
   

The Wall Street Journal quotes Nicholas Negroponte as saying in March 2007 that by the end of the year, 3 to 5 million laptops would be sold, and 50 to 150 million in 2008. To be fair, that was when the schedule called for production to begin in June.

olpc production line
1 laptop, 2 laptop, 3...

Nevertheless, such a prediction is a fantasy. Product markets do not grow by over 1000% in a year. I predict less than half a million in 2007. At $100 million on the first few months, that would be comparable to Compaq's astounding first whole year.

We could see sales of three to five million in 2008, or up to $1 billion. Then maybe as many as 10 million in 2009. I don't think we'll hit 50 million (say, $5-10 billion, depending on the balance between price cuts and added features) before 2012.

But all that depends on whether Microsoft and Intel succeed in their full-court press against the XO and against the children of the world through gifts and deep discounting, or whether governments consider their offers on the merits, including future costs. Or whether a few more billionaires step in on one side or the other. Or the public gets activated. Therein lies the $64 billion question.

With the Give One Get One program, OLPC looks like it will take in 100,000 orders for 200,000 units by the end of the year. Uruguay and Peru are apparently ordering 150,000 in 2007, and rather more in 2008, but we have to wait for the legislative appropriation process in order to know. Reaching half a million by the end of December remains possible, but is unlikely.

Changes of government, by coup in Thailand and election in Nigeria, have apparently scuttled those countries' plans to buy XOs. Brazil can't order this year, and has a legally-mandated process to go through, requiring competitive bidding, before it can do anything in 2008. A number of other countries might place significant orders, or they might not.

Market analysis doesn't give any answers to what is essentially a question of corporate and power politics.

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19 Comments

What is wrong with this? What happened to helping to educate american children who's parents can't afford to buy them a computer. Why would I go out and pay double for one of these computers in order to help someone in another country? Having spent over 20 yrs in the staffing industry and knowing we do not have many americans who could not afford to get a degree or get a higher education in order to fill positions that we give to people from other countries. These jobs go to people we have paid to educate. Why not help our own. After watching the story on 60 minutes last evening it made my stomach turn to think of people like Mr. Negroponte more interested in helping other countries more than his own. America made him, now it is time for him to give back to america. Stop giving America away. Lets get America educated first then worry about other countries. These other countries are the ones trying to find ways to kill americans daily. Even Brad Pitt is helping his own even though he and Angelina made adopting children from other countries ihe new it thing. "Adopt American","Feed Americans", "Educate American". CHARITY BEGINS AT HOME NOT ABROAD.

Betty-

the other countries pay for the laptops for their children. If some American government wants to buy some it can (like Alabama, that considers acquiring 15 000). And if individuals (like me) want to donate to another country, who are you to judge them? By the way, the development of the OLPC is in America and creates jobs (and with it taxes) here.

"But all that depends on whether Microsoft and Intel succeed in their full-court press against the XO and against the children of the world through gifts and deep discounting, or whether governments consider their offers on the merits, including future costs. Or whether a few more billionaires step in on one side or the other. Or the public gets activated. Therein lies the $64 billion question."

Wrong.

I really depends of what the early-adopter feedback is. There are many un-answered questions surrounding the OLPC project:

1. Warranty coverage (what's covered and for how long, etc.)
2. What to do when the computer breaks? Who do you call?
3. How well are the actual features received by end users? For example: will people be happy with a browsers without bookmarks? Or a laptop that can't use a printer? Or a computer that won't have access to maintream software?
4. How will the laptop impact a kid's education?

Those are the really critical issues that will ultimately decide the OLPC's destiny. It is not about Intel or Microsofy. It is about how worthy Negroponte's offer is.

A good question that has never been answered is why no developed, rich country is taking advantage of this wonderful opportunity to improve their education system by empowering kids with the XO. How come rich countries are not interested? We can speculate all we want about corrupt, ignorant little countries giving in to Intel/Microsoft imaginary/real machinations. However, what's the reason the rich, fair, non-corrupt guys won't bite?

hmmm...

OLPC has got over 650 thousand confirmed orders TODAY. Will produce max 300,000 by the end of the year, cause mass production has to be ramped up progressively.

> Product markets do not grow by over 1000% in a year.

OLPC is new, it jus started, there is no cheap laptop market today. Intel and Asus don't even come close to what OLPC is doing.

So it is impossible to know how many millions of XOs will be produced next year. It may be a few millions or it may be a hundred million units.

Quanta, Asus and whoever wants to participatve in producing XO computers DEFINATELY can ramp up fast enough to produce 100 million or more by the end of next year. It's just not possible to produce 650,000 or more per month the first month of mass production, but the production capacity can definately be more than 1 million per month as soon as the beginning of next year, and if some countries order 5 million laptops to be delivered in March, then I'm sure Quanta will manage to deliver and have its mass manufacturing capacity ramped up by then.

Edward said: "Reaching half a million by the end of December remains possible, but is unlikely."

According to Wayan's last count http://www.olpcnews.com/laptops/xo1/olpc_sales_xo_laptops.html OLPC has already sold 600.000 laptops in the past two months. With 4 more weeks to go I can easily imagine that figure increasing by another easy 100.000 XOs sold via G1G1.

Robert said: "A good question that has never been answered is why no developed, rich country is taking advantage of this wonderful opportunity to improve their education system by empowering kids with the XO."

Actually we (OLPC Austria) are currently in talks with the Austrian ministry of education about a pilot to take place in 2008. For obvious reasons I can't say more at the moment but stay tuned for details in early 2008.

Also as Bastian pointed out US states such as Alabama seem very interested in the project and I think we're going to see more interest from North America and Europe in 2008!

Betty, America doesn't want to get educated. High school drop out rates are the highest they have ever been. And the kids have all the available opportunities to stay in school. The OLPC idea is to subsidize basic education for poor schools that are unable to provide reading/writing materials for the children. If you look at the current pre-school classrooms in America today, do you ever wonder how much all the materials (drawing books, crayons, charts, toys, learning aids etc...) the kids have access too actually cost? Well the purpose of the OLPC is to supplement ALL those materials in one 'affordable' device. This may sound unrealistic, but its a very promising start. When I read your column, its sound as though you are concerned that these POOR kids will be getting a higher level of education just because they are using a laptop. Please look inside your heart and realize that YES, indeed there are others less fortunate than yourself on OTHER continents. America is NOT the world. Please donate a G1G1 laptop.

Robert said: "A good question that has never been answered is why no developed, rich country is taking advantage of this wonderful opportunity to improve their education system by empowering kids with the XO."

As has already been pointed out, Birmingham, Alabama, U.S.A. is interested but the fact of the matter is that hundreds of millions of dollars, perhaps billions of dollars, have been spent on the purchase of computers for use in the public education system as teaching tools here in the U.S. We don't have a hell of a lot to show for it.

I'd like to believe that the XO can make an impact where earlier, less capable technology failed but the underlying problem is that politicians make lousy educators and the more deeply the education process is enmeshed in the political process the less likelihood there is of good educational outcomes.

The fact that the intended customers of the OLPC are the education ministries does not fill me with confidence. For good reasons and bad if you believe the OLPC can have a dramatic impact on the quality of education in poorer countries the education ministry is a bad choice if you want to do anything quickly.

FYI, Leo Laporte, John C. Dvorak, Steve Stecklow, and Cory Doctorow discuss the OLPC on TWIT. Podcast audio is

http://www.podtrac.com/pts/redirect.mp3/aolradio.podcast.aol.com/twit/TWiT0124H.mp3

Steve Stecklow is the WSJ writer that did OLPC article last week or so.

There is also an NPR segment

Listen in the Real Audio format (Nicholas Negroponte starts at 5 minutes 10 seconds in) link: http://olpc.tv/downloads/npr9535.smil

story link at http://www.npr.org/blogs/talk/2007/11/188_laptop.html

"1. Warranty coverage (what's covered and for how long, etc.)
2. What to do when the computer breaks? Who do you call?
3. How well are the actual features received by end users? For example: will people be happy with a browsers without bookmarks? Or a laptop that can't use a printer? Or a computer that won't have access to maintream software?
4. How will the laptop impact a kid's education?"

Bastian, what are you talking about?

1. The website clearly states that the warranty is 30 days DOA type. You're getting it as a gift for your donation, you aren't dealing with a commercial company.

2. You can call me, but I'll have to charge you for it. Just like when your warranty runs out on your normal computer.

3. I can install any mainstream linux software that will run on the hardware. My son can't, but he doesn't really know what 'mainstream software' is.

4. Printer? Good question.

5. Lasting effect? No idea for american kids. I think it will when more content is available. Which is something I'm franticly working on.

Christoph,

While Negroponte announced the Peru order, it has not be fully approved by the Peruvian government. Also, until we have a full confirmation from OLPC, no one knows exactly how many XO's have been ordered in 2007. My earlier post was a best guesstimate - as is Ed's.

Seth-

the post you respond to wasn't from me but Robert.
I think it is planed to use printers hooked up to school servers.

Why would you question Negroponte's word in the Boston Globe about the 260,000 XO order was notarized in Peru?

Why would you question Romano Prodi's word on Italy donating 50,000 to Ethiopia?

OLPC has got more than 650,000 confirmed and paid for orders today, those are going to be delivered I guess between last week and February or as fast as Quanta can ramp up the production. It's got nothing to do with those fake Intel sales of the 700,000 Classmate PC in Pakistan for 2009. OLPC is happening right now, for real.

650,000 is without even including all G1G1 and Give Many sales yet, which can most probably only grow during this month. There are most probably efforts in companies where they can get the XO for $159.95 through the company matching the donation and the initial order thus gets $240 substracted from taxes, where a whole bunch of co-workers must be ordering these by the bucket-loads. OLPC is getting free advertising on billboards, on TV, in magazines, newspapers everywhere right now.

Charbax,

With Negroponte's history of overstating sales, how can we take his word on Peru now? Personally, while I'll give him the benefit of the doubt that he has a notarized something from Peru, until the Peruvian government says so, I still have my doubts.

And by government, I mean mid-level implementers, like Ceibal in Uruguay, not just the President in a news conference

Why is Charbax allowed to rant in such irrational manner? He's gotta be the only person in the planet not noticing Negroponte's history of lying and misrepresenting.

Edwin,

"Nevertheless, such a prediction is a fantasy. Product markets do not grow by over 1000% in a year."

Are you saying demand can't grow that fast, or that production can't be increased that rapidly? And whichever you think is the case, what is your reasoning? It seems to me entirely plausible that the XO will catch on in a big way and be selling in the tens of millions in a couple of years.

Please all, read other posts before getting into an argument about Peru acquisition. I've said this as a response to a compatriot in the "More OLPC sales..." post: Our government has bought 40.000 for this year. The other 220.000 are slated for 2008 under the budget law, so any money transfers will take place NEXT year.

As far as I understand this, this means that Peru has bought just 40.000 in 2007. Negroponte's accounting is quite creative if he's including the other 220.000 in this year's book.

Charbax wrote:

"Why would you question Negroponte's word in the Boston Globe about the 260,000 XO order was notarized in Peru?

Why would you question Romano Prodi's word on Italy donating 50,000 to Ethiopia?"

Because Negroponte has repeatedly and blatantly lied about his sales figures (and many other things!) in the past. That's why.

In fact, as Eduardo Villanueva points out, the 260,000 Peru order is really 40,000 as of today.

I'd be really surprised if actual orders (as in Negroponte having the money in the bank TODAY, instead of someone expressing some interest) were over 200,000. Yes, that's not a typo:

100,000 sold to Uruguay
40,000 sold to Peru
20,000 sold through g1g1 (but nobody knows the actual figures)

That's 160,000.


Even if we are generous and make the G1G1 figures go up to 60,000, we are still at 200,000 a number way below the oft-cited 600,000 figure.

The sales numbers are confusing. The numbers that I've seen in the popular press fall into a few broad categories:

"Commitments" (some of these may be handshake agreements...others may be in the form of a 'letter of intent' of some kind; these also are conditional). The original plans were based on five target countries buying 1 M units each.

"Orders" (a contractual obligation to buy; most of these have cancelation clauses). Orders are happening in the 100,000 unit range, not the 1 M range. The original orders estimate was off by one order of magnitude.

"Shipments" (the number of XO laptops that end up in the hands of end users). I'll be surprised if more than 100,000 units are actually shipped this year. It will not surprise me in the least if I don't get the XO that I ordered until 2008, maybe late in 2008.

This last category, shipments, is where the rubber meets the road. If OLPC cannot show that it can build and ship, in big volumes, and soon, future orders and commitments won't materialize.

Disconcerting to me is the fact that many of the supplier partnership agreements and costs were apparently based on the achievement of unit shipments in the millions. Now that the actual customer demand is falling short of projections, the business case is starting to fall apart. Hopefully, the key suppliers will hang in there while demand builds. They may not.

The current costs (and selling prices) for the XO are simply too close to what is possible today with a Microsoft/Intel product and are causing some governments to realize that they have choices when it comes to low cost computers.

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