Pennies Per Month? Not Quite Ms. Jepsen

   
   
   
   
   

In a telling passage showing the BBC News read my calculations of the real cost of OLPC's, they asked Mary Lou Jepsen, Chief Technology Officer for One Laptop Per Child, about these "extra" costs in their "$100 laptop set for launch" interview with her:

However, there have been claims that once distribution and repair costs are taken into account the true cost of the laptops is nearer $1,000 than $100.

Ms. Jepsen admitted that these costs do exist, but said they were "literally pennies per month".

"There is, in kind, contribution from the governments that do the distribution of the laptops, but other than that we're dropping 100,000 units a month to each country," she added,

Interesting, how did she get to "pennies per month"? It's not by using the costs I calculated over OLPC's stated 5 year XO-1 laptop lifespan goal.

When I projected a 5 year budget to bring in a reasonable training and curricula integration module, I didn't believe that the $1/child/year Internet access would extend beyond the first year of implementation, and therefore came up with a $972/child total, ($194.40/year or $16.20/month/child for the 5 year plan).

To get down to "pennies," (let's say four cents, otherwise its nickels) this investment has to be amortized over 2025 years ($0.04/month * 12months/year = $0.48/year * 2025 years = $972). No matter the durability of the Children's Machine, it's not going to last that long.

Perhaps she meant to say pennies per day? Four cents per day is $14.60 annually, so in just 66.6 years, the $972 cost is spread out to pennies per day.

For argument's sake, maybe $972 is too high, so let's trim it down. The "Thousand Dollar Laptop" cost presumes an initial laptop cost of $148, but OLPC predicts this will decrease, falling under $100 once heavy production starts, so let's use $100 as the average for OLPC XO's. Let's further presume that the $1/user satellite Internet holds, leaving maintenance (down to $5/laptop/year with the $100 laptop) and training budgets. This gives us a friendlier number, of $376. Now it only takes 25.75 years to spread this cost out to get down to $0.04/day (783.3 years at $0.04/month).

At the very low end, at $208/laptop, the amount extracted from the Libyan MOU, it takes just over 14 years to amortize the cost down to "pennies" (per day, of course, per month, well, we're still in the hundreds-of-years). At the lowest possible number to use, $100, it takes 6 years at pennies per day, or 208 years at pennies per month, and this doesn't include installation, training, Internet access...

Maybe she is just talking about these services? Even the super-cheap $1/year for Internet is eight cents per month, but once you start adding back in initial setup, training, and maintenance costs, you're talking more significant pocket change.

Ms. Jepsen's remarks reminded me that I forgot to include shipping costs... "And that is not very expensive - it really is cents per laptop to ship."

Let's hope not!

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3 Comments

1. No one says "nickels per" anything, nor even "dimes per" nor "quarters per". Think about ol' Sally Struthers and her guiltomercials. Does it cost 10 bucks to feed a starving family of five each month? Mere "pennies per day". So "pennies per" something can mean anything up to the point where you would be forced to say "a dollar per" something. Let's say 80 or 90 cents.

2. Jepsen clearly felt no need to use your assumptions (the cheap net access going away being maybe the most glaring one) and we don't have access to the actual numbers used by the project, so this kind of speculation is really unnecessary. Some more transparency would be nice, and I imagine it will be required by the governments taking part in this thing, but just saying "I don't think they can do it because this totally different project I was working on was more expensive" is not especially constructive.

We may never know exactly what kind of deal OLPC works out with each government, any more than we know what kind of deals Microsoft gives out when they're trying to undercut a Linux migration.

While OLPC itself might be a not-for-profit (I actually don't remember whether or not it is), its suppliers and corporate partners surely aren't. For all we know, they're planning on sending a thousand MIT students to Africa or wherever each year on co-op to handle the implementation details. I hope they'll be more forthcoming in the future but using your own figures to impugn their proposed bottom line is just a straw man.

Glad to see you're still reading, raindog! It's always good to get some critical voices, even when you're criticizing the critics!

I overall agree with your point, the real reason I at least keep harping on this is stated effectively by Wayan in his last post: http://www.olpcnews.com/sales_talk/price/negroponte_billion_dollars.html

This is a huge undertaking from a cost, implementation and technology issue. No matter how fantastically the laptop is designed (and from everything I've seen and heard, it's top-notch), there are going to be problems in the implementation, and a need to modify plans and adjust. It is irresponsible (not to mention a repeat of the last 50 years of painful lessons in failed development projects) for someone to say "trust us" and then ask for a country to deeply and permanently place itself into debt. Until I see OLPC accepting the implementation elephant in the middle of the room, I'm going to continue critiquing them for ignoring it, or at best not publicizing their strategy.

So it would be better to leave 3rd world without internet access? Or somehow magically the other proposals have smaller internet access cost?

If you know so well how to implement such projects, why not join OLPC? participation is open. Oh I get it, then you don't get any banner hits, like you now do when posting sensational articles here.

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