The Real Price of Intel's Classmate PC and Asus Eee PC

   
   
   
   
   

I am Charbax, of OLPC.TV. I think that Intel and more recently Asus has been getting a lot of attention from bloggers and the media about their Intel ULV-powered Windows XP-ready XO-alternatives.

olpc classmate
Classmate over OLPC XO?

A lot of bloggers and news media are reporting that the Intel Classmate PC costs $225 and that the Asus Eee costs $199. Some bloggers are saying it wouldn't make sense for a government or anyone interested in cheap laptop computers to buy a AMD Geode-powered thin Linux running XO laptop when you could get a fully featured Windows XP laptop running on an Intel chip for $20 or $40 more.

But what are the real prices that Intel would charge a government that would like to order 1 million laptops? Does Intel at all plan to manufacture that many Classmate PCs when they have just announced the lower power and hopefully lower cost Menlow x86 processor?

Back in January, Intel was saying that it's Classmate PC really cost over $450 to manufacture. Suddenly by the middle of the year, we hear:

Intel's "Classmate," manufactured in Taiwan, costs 285 dollars and the price will drop to 200 dollars at the end of the year, Intel spokeswoman Agnes Kwan told AFP.

Several thousand units have been shipped to Brazil, Mexico and Nigeria, she said, and the target is 100,000 laptops by December. And Pakistan has ordered 700,000 for 2009, she noted.

Can Intel be trusted on its intention to manufacture cheap laptops in large quantities anytime soon? Or would their spokespeople only be trying to influence bloggers and other media into saying that Intel's solution costs the same as the XO? And do so without ever planning to mass manufacture the first generation of Classmate PCs.

When a government is in talks with Intel about the Classmate PC, probably that Intel provides them with small quantities for testing, but are those small quantities intended really a sample of what Intel wants to mass manufacture, or are the Classmate PC just there to make it look like Intel has got an alternative?

olpc classmate
Intel's Asus Eee PC debut

Many bloggers have talked about the Asus Eee supposedly being available soon at $199 and $259. Asus and Intel jointly made that big presentation of their OLPC-competitor at Computex in Taiwan several weeks before Intel finally announced that they were joining OLPC.

Recently at the Intel Development Forum, Asus admitted that most of the initial shipments of the Eee are likely to be the "mainstream" $369 configuration. In these times where mass manufacturing of the first really cheap XO Linux laptop is imminent at Quanta's factories in China, for Intel and Asus it is all about getting as much publicity on blogs and in the mainstream media.

But are they really preparing a cheap laptop alternative, or are they just after slowing down momentum that the XO is getting? Quanta is Asus main rival in the laptop manufacturing business in Taiwan. AMD is Intel's main rival in the x86 processor manufacturing business.

Are we dealing with real honest competition here from Asus and Intel? Or has it mostly been so far a mere game from Intel and Asus marketing department, getting bloggers and the media talking about their OLPC XO-alternatives which aren't seriously going to be manufactured?

I think that the Eee will mostly be available in the $369 or $399 configurations, cause I really don't think that Asus can manufacture and sell the Eee at $199. That was probably a made-up price which they said back in June that they would sell limited quantities of the Eee to governments in developing countries, thus basically selling Eee at a loss in small quantities to governments.

To feed some of the bloggers, Asus might ship very limited quantities of the cheaper Eee model before Christmas, just so that they can keep having bloggers talk about it being an OLPC alternative, most probably Asus doesn't plan to sell large quantities of the Eee at $199 anytime soon.

Asus and Intel probably are hard at work on the Classmate-2 and Eee-2 for 2008 to use the Menlow processor. That second generation Asus/Intel laptop due in 2008 hopefully will have a better battery life, really be low cost this time, although Intel hasn't said much yet about the price of systems to use the Menlow processor. And why wouldn't Intel and Asus use the OLPC's revolutionary sunlight readable low cost screen for their next design?

Though one cannot know if Intel and Asus really are ever going to be interested in shipping large quantities of cheap computers, making smaller margins and cannibalizing their existing market of expensive laptops that provide both PC industry companies such as Intel and Asus and their retail and distribution partners with large profit margins on each laptop sale.

Are Intel and Asus at all interested at this time to start shipping low cost laptop computers, making small margins at large volume?

Related Entries

25 Comments

Charbax,

As much as I may consider OLPC News influential and blogging a powerful medium to influence press and even Presidents, I don't think Intel or Asus is making the multi-million dollar commitments it is to new technology to impress us.

I do think they are trying to find models that satisfy demand at the largest scale possible. And I am sure they are trying to make as much profit, and not a penny of loss, in that effort. Bloggers be damned.

This is one of those "welcome to the NFL" moments. Companies will say almost anything to try to gain position as a new market starts to open. The old adage says "I'll sell you a Cadillac for $50 - delivery in 20 years". It certainly seems that delivery on the lower-priced Asus laptops will be slower than the higher-priced units.

It's important to note that the XO is a different beast than any of the others. Let's not fall into the trap of considering one laptop pretty much equivalent to any other. Asus describes their Eee machine as running Windows Vista - a pretty neat trick with a flash drive of only 4 GB size. Unless they do some tricky optimization of the OS (to keep swapping in RAM, at least) they're going to risk wearing out the flash drive in not too long a time. And only a few applications will even fit in the flash, let alone data.

Asus is presenting a laptop just like all the others, only less capable and less expensive. The XO is an open device with many features designed for use by kids. It is very unlikely that anyone will write an application for the Asus Eee, whereas there should be lots of applications written for the XO. In a sense, the Eee and its kin are a door to the past while the XO is the door to the future.

But we will have to go through the door, as I said in my previous "Punt" posting. I can think of few things more disheartening than seeing XOs serving simply to boost their owners' prestige. They should all be used to develop applications. While I won't be buying a pair I will be talking to some other developers who work in the same market space to see how they could base their next product line on the XO design, which I assume will provide a template for a range of product designs.

In order to facilitate this kind of development we will have to have a website for XO developers that is independent of OLPC. I solicit anyone who is interested to consider starting such an independent developer's forum and information exchange.

Lee said: "Asus describes their Eee machine as running Windows Vista - a pretty neat trick with a flash drive of only 4 GB size."

Sorry Lee, I was under the impression the Eee was loaded with a Linux OS. I cant see anything Microsoft except for maybe CE fitting in the Eee. Care to share the link where Asus says anything about Windows software?

The reports I've read also mentioned the delay to October release of the Eee being for a rethink on pre-installed applications after feedback from test users.

I'd also like to point out that the XO is a Kids machine, not an adults machine and should be used accordingly whereas the Eee is intended as a user appliance for adults and the design reflects that.

"It is very unlikely that anyone will write an application for the Asus Eee" - Umm...its a Linux OS, users can install any one of thousands of free applications. I plan to write several applications myself. Should be fun.

Lee, You may want to take a look at this picture of the Eee desktop. Looks like a Linux OS to me.

http://www.hothardware.com/articleimages/item981/big_a50.jpg

The (non-Eee) Asus laptop on the Eee pre-purchase page lists Vista, and the Eees, while default-installed with Linux, will also run XP. I'd be surprised if even their top Eee model can really run Vista, and if they've claimed this somewhere, it's probably more fluff.

"and the Eees, while default-installed with Linux, will also run XP."

So XP can run now from flash? Do they have added a disk controller to the Eee?

The behavior discussed by Charbax is exactly what Intel has been doing for decades, and for which they are now in court.

Winter

Has anyone done a components analysis of the $199 Eee to see what it really cost to manufacture?


jon,

"The (non-Eee) Asus laptop on the Eee pre-purchase page lists Vista, and the Eees, while default-installed with Linux, will also run XP."

But Microsoft is going to stop selling XP next year, except for the terrible XP Starter Edition.

http://www.news.com/Microsoft-extends-Windows-XPs-stay/2100-1016_3-6210524.html?part=rss&tag=2547-1_3-0-20&subj=news

winter wrote: So XP can run now from flash?

From a USB flash drive it sure can: http://tinyurl.com/74hyx

And I think it's easy to answer the question of whether Intel and Asus will ever ship large quantities of low-cost, low-margin computers: if they can make a profit doing so, of course they will. Why wouldn't they? It's their reason for existance.

> And why wouldn't Intel and Asus use the OLPC's revolutionary sunlight readable low cost screen for their next design?

I give up. Why wouldn't they?

It's a good, although hardly revolutionary, design since it accomplishes several worthwhile goals. If the display's part of the solution to the problem of getting computers into the hands of poor people what's the objection? Isn't bridging the so-called digital divide the goal?

Lee Felsenstein said . . . "I can think of few things more disheartening than seeing XOs serving simply to boost their owners' prestige. They should all be used to develop applications. . . . In order to facilitate this kind of development we will have to have a website for XO developers that is independent of OLPC. I solicit anyone who is interested to consider starting such an independent developer's forum and information exchange."

I agree completely, Lee. Perhaps OLPC News can carve up a little extra server space here for such a project? As a novice about all things Linux and computer programming in general (I'm reminded of the Groucho Marx quote of something "being so simple that a child of four could do it" and then immediately asking the whereabouts of that same theoretical child of four to help), I would certainly welcome a dedicated web page for just such guidance . . . written in as plain as non-technical English as possible, so that all can potentially participate. Those theoretical pre-teen third world Linux programmers sitting out in direct sunlight might be able to instantly do such things. But I'll certainly need a little technical hand holding to get me started!

I was surprised to find this shot of the Eee on the 3dnews.ru website showing it running Windows XP.

http://www.3dnews.ru/_imgdata/img/2007/09/19/60154.jpg

Maybe faked?

I'm embarrassed to find that I did not adequately research the Eee's specifications (if such preliminary claims can be considered secifications). I simply followed the link in the article, which led to the Vista units, and assumed that this was the fabled Eee.

Of course, Linux would make a big difference in terms of programmability and the ability to port applications. I continue to be suspicious of such early-stage specs and feel that they are still in the nature of claiming "we'll do what everybody else is doing". This is not how OLPC is handling the XO development.

Others will follow the XO design when it demonstrates its capabilities and shows some market acceptance. But until then no other manufacturer will commit to any spec or price point. My advice would be to stick with the industry leader until other designs stabilize.

Wikipedia on the Eee:

http://en.wikipedia.org/wiki/ASUS_Eee_PC

Says the price has gone up from $199 to $259, and "went from a 4 to a 2 gigabyte solid state drive, the VGA camera was dropped and the RAM was decreased from 512MB to 256MB."

Also that it will come with Linux, to save money, but it is possible to run Windows XP.

Here's an interesting source for info on the Eee. It's a blog for (future) users.

http://www.eeeuser.com/

allen wrote:
> I think it's easy to answer the question of whether Intel
> and Asus will ever ship large quantities of low-cost, low-margin
> computers: if they can make a profit doing so, of course they will.
> Why wouldn't they?

What if they cannot make a profit selling laptops as cheap as OLPC can? What if it was impossible to compete with a non-profit?

What if Intel could start mass manufacturing cheap laptops but would rather not start replacing the expensive laptops on the market with cheap laptops at this time cause it is not a strategy that interests them? Intel might be aware that competitors can force them into starting to make cheap, low power, unbloated computers, but they'd rather not initiate that change in the industry. Intel might want to do whatever they can to delay or kill off any competitor getting too close to validating designs for cheap unbloated laptops that can be mass manufactured.

Intel is making plenty of money the way the current computer industry is going. Why should they want to change that. We're talking about the possibillity that everyone start using $100 laptops, not just the third world's kids.

TO be honest, the only think I love about the OLPC from a real world user perspective is the low power use and the screen technology. The wireless is ok too. The interface I have not used, but I am not a school child either, and might like it, but I don't know? Can adults use this GUI and do REAL work (office documents with ODF XML formating for default save of documents, spreadsheets, presentations, edit photos, do email, play MP3s, edit MP3's or Ogg files, some games, etc) with it too?

I got some questions about the buy 2 get 1 deal, that will be going on in November? Who is a contact person at OLPC that we can get these answers posted so that when the $400 buy two, get one deal is in play that the word is out on the feature set so that it appeals to adults.

1- Can a user upgrade the Flash size in the OLPC?

2- Can a user upgrade the RAM size in the OLPC?

3- Is a device on the USB port something we can boot from with the OLPC?

4- Can we load a different version of the LINUX OS on the OLPC (like Ubuntu Mobile, or something light like DSL or Puppy Linux, or one of the other lighter versions of LINUX).

5- OLPC has AbiWord, but AbiWord is not fully OpenDocumentFormat friendly yet... so, why include it?

6- We need to run applications like are being developed for the Nokia N800 found at http://maemo.org AND we need full ODF office applications. We need to run Gwenview, Krita (or Gimp), a email application that does IMAP, a Browser (Opera or FireFox), a

7- And we need to be able to boot and run a USB device that is powered by the USB port (DVD, CD, ROM and DVD or CD writers, and external hard drive powered by USB port as well. For example: can we can watch a DVD movie with the OLPC via an external USB powered DVD player device (and boot from that device using the LIMP Live CD.

Also -

8- Need to run - Flash (of course YouTube), Real Player, Java needs to run too...(something that the folks at the N800 maemo.org are playing with but not easy to install as it is not loaded by default).

9 - External size USB keyboard, does one work?

10 - And what about external VGA (note that ASUS Eee has this and it seems like it could be a plus for them to have it (again for adult work on a real size screen vs the smaller one that is better when portable needs are ok for such a small screen). And the external VGA port allows the use of the Eee with a projector unit for meetings as well. This is a plus. Does OLPC have this external VGA or projector screen capable function?

11 - I like all the features of the ASUS Eee PC machine, except that low battery time, the fact that the Flash Storage onboard is not something that a user can upgrade themselves (using a SanDisk, Samsung, or other SSD, I do hear that the RAM is something we can upgrade to 1GM, but who really knows as ASUS has not published any specs yet) and the screen is not sunlight friendly at all (same old screen as regular laptop....). Oh - let me add that the Nokia N800 has the same old type screen too that is trouble in sunlight, both could use the OLPC screen and get better use of the battery.

12 - I have not played with the OLPC, but I am sure that when I do that I will have comments. I had 20 comments for example that I sent in to Nokia, when I got the N800 that I turned back in for a refund after 21 days as it did not have JAVA (needed to run some web apps, etc that were important),

Finally, OLPC would be wonderful for small non-profit organization treasurer to use to do books and it could be passed along (at a $200 cost why not) to the next treasurer to use to do the "books"... but, there is no FUND ACCOUNTING application that is GPL or FOSS, that runs on LINUX or anything else (windows or any other that I know of)...

Schools, Governments (even 3rd world Schools and Governments have budgets and accounting needs) also small non-profit organizations could use such a small portable device for keep their books (accounting). BUT, they should not use software that is not designed from the ground up for FUND Accounting.

For LINUX, there is no non-profit FUND ACCOUNTING software to be found (GNU CASH is not capable of doing this). None at all. I have blogged this, and when I do I get no answers as it seems that the developers have no interest in such boring stuff as accounting applications (there are several for individuals and businesses that are FOSS and some GPL, however none for FUND ACCOUNTING needs of a non-profit, school, or government at all.

Parson's technology's MoneyCounts did fund accounting (sold to churches for about $12.00 in it's day), now this is owned by Intuit, and Intuit killed it off and has a fund accounting application that you need to pay a lot of money for every couple of years.

See this string of comments about this at a Linux.com review of MoneyDance (not non-profit) but the comments are what are important here: http://www.linux.com/feature/61672#

Comment sections of interest here:

http://www.linux.com/?module=comments&func=display&cid=1161552

Parson's technology had something for DOS but no GUI available today for such a price:

http://www.linux.com/?module=comments&func=display&cid=1161556

Details about the needs of a FUND Accounting application are here... Maybe someone at MIT could do this (might be boring for them, but it would benefit many in the world to have something that would do this).

http://www.linux.com/?module=comments&func=display&cid=1161554

Helpful FUND ACCOUNTING .pdf file link here:

http://www.linux.com/?module=comments&func=display&cid=1161555

I've got a much simpler and utilizing Occam's Razor, better explanation: the folks at Intel think the technology has developed to the point that they can produce salable computers to the sub-$300 market.

Since this is terra incognito they're starting from something that's familiar - the conventional laptop - and making the smallest in the way of variations necessary to bring the design to the planned price-point. If the market bears out the assumption then they can get a bit more adventuresome in their design. If the market turns out to be immature, which is one inference to be drawn from the escalating price of the XO, then the loss isn't too great.

Reader's list of desiderata is a perfect example of what I call "candy store marketing", in which desires quickly outrun reality. I seriously doubt that Reader will be accommodated at the XO price point. I wish him or her lots of luck.

The important question is not "will it do what I want to do", but "what can I make it do that I want to have done", particularly when used by children. OLPC was supposed to be about a lot more than getting commodity laptops into the hands of children, and a major point of my criticism was that they were skimping on the whole question of courseware and software development, relying on a presumed phenomenon of self-pedagogy.

The personal computers that we started building in 1975 were jokes as computers - they wouldn't do regression analysis, run COBOL or FORTRAN programs, had no peripherals and couldn't be programmed in Job Control Language. Why bother?

Well, most all of them ran BASIC, which appealed to a small coterie of enthusiasts who either wanted to learn how to program anything or who had visions of how kids could use computers. When I designed a video display adapter that opened a high-bandwidth channel from the program to the display screen it was quickly put to use in interactive computer games, a category of use that was almost nonexistent previously.

People have to do the equivalent with the XO - create the applications that fit the device to the intended market. If OLPC can survive while this process unfolds, great, however the design may outlast them if enough people take up the opportunities that are inherent.

All this kerfuffle about XO vs Asus would be irrelevant if the OLPC project were what it claims to be - not a laptop project but an education project. But its plainly a laptop project because OLPC are rattled by Asus.

Now if it were a education project then the emphasis would have been on provided a turnkey software system for education and THAT could have been ported to Asus with little bother. Asus would not be a threat - just another platform.

Software and education are the poor relations of this project whereas they should have been at the front driving the thing. The attitude has been 'hey we'll invent this gizmo while being paid and then somebody will do all the hard work for free figuring how to use it in education and writing those essential apps.'

The idea was that the children would do it! Oh boy. Or the teachers after their 9-5 duties. But actually programming and design is tough and it takes a lot of practice and study to get it right - its not trivial at all and expecting the kids and teachers to solve the problems that OLPC have not solved is just daft.

Fact is: some money should have been invested in a professional team of developers to develop good educational appsfor this machine. It just (ab)using the open source community to offload your difficult problems without putting your hand in your pocket.

So this 'buy one give one' stuff is not about education but about rescuing OLPC from a hole because nobody will buy the damn thing. Hence I for one feel disinclined to pony up the 100% surcharge.

Mark Tarver,

"Now if it were a education project then the emphasis would have been on provided a turnkey software system for education"

The problem is that this sort of one-size-fits-all approach to educational software is that different countries have different educational needs.

As to the countries developing the software, remember one thing they have is an abundance of cheap and volunteer labor. And what is wrong with teachers and students developing software? You say "But actually programming and design is tough and it takes a lot of practice and study to get it right" I remember that people said Linux and every other open source software project would fail because it was not be produced by professionals. Do you think a law should be passed that only Western professionals be allowed to write educational software?

"The problem is that this sort of one-size-fits-all approach to educational software is that different countries have different educational needs."

Granted; although a good educational package in e.g maths should port to just about any country modulo language differences which can be ironed out. But OLPC really haven't got anything. You need training packs in different languages, software, teacher training courses.

"I remember that people said Linux and every other open source software project would fail because it was not be produced by professionals."

Linux was crap when it first appeared - fit for home hobbyists, and, in the final analysis, simply a copy of something that had already existed prior to Linux - Unix. It eventually evolved into something friendlier than a cornered rat after many man years of development.

But just because someone is a home hobbyist does not mean that they are not professionally trained. If you took the bacground of many of the people who contributed to Linux I'd bet you'd find many college grads and professional hackers amongst them. Not 10 year old kids or struggling teachers, but pros.

"Granted; although a good educational package in e.g maths should port to just about any country modulo language differences which can be ironed out. But OLPC really haven't got anything. You need training packs in different languages, software, teacher training courses."

Sorry to sound unpolite, but simply put, this shows a complete ignorance of how educational methods are developed in both the developed and developing world.

Every country has its own approach to teaching in general and to the subject matter presented to the children. Translating existing , US?, material is just about the worst way to introduce a new package.

This reminds me of all htose stories about children in the colonies having to learn things from the "motherland" that were worse than useless in their country. This holds TOO for Math.

"Linux"

You are putting derogative terms on the OS kernel that has the most developers in the world, some of whom are the best developers the planet has to offer.

You might really dislike Linux, but it is good enough for the top 500 supercomputers, cell phones, and anything in between, and runs on about any CPU in production. So your personal dislike is clearly not shared by those who really know how to select an OS fit for a task.

Are you really sure you know enoug about Linux to deride it this way? And did you take into account the difference between the Posix standard and an OS implementation? The word "copy" makes it sound much more easy that it really is. In the same way, the space-shuttle is a copy of the Wright brothers airplane.

You can say that the three most used GUIs have their quircks, especially when combined with secretive hardware and antagonistic laws. But I have yet to meet someone in person who really has difficulties with KDE. I meet hordes of people on a daily basis who have problems with the non-Linux alternatives.

Winter

I think the OLPC and EEE are two very different units. The eee is marketed as a small cheap linux laptop, suitable for work, education and home use. This is precisely what I as a reasonably well off westerner want (especially as I can't afford a new laptop). The OLPC is design to be sold in bulk to governments, charity's etc. I don't see that the products are competing for the same markets. There may be a small education over lap however I expect that the OLPC will be more popular where cost is more important and surely that is the main point of OLPC? I don't think anyone should complain about either project as both will lower costs and allow more people access to computers.

I have some sympathy for the original post that speculates that the companies are afraid that they are undermining their more expensive notebook market precisely because I see a minimal notebook for $400 as highly attractive. I'm being offered what I really want - a super portable for a bargain - not a premium price. I don't need or want a wide screen or an 80 gig HDD or Vista or even XP - I already use Linux for browsing, blogging, email. It has everything I want on the road and nothing I don't - and it is cheap. It sounds like the eee RAM is upgradeable and that you can expand storage with a USB key. This form factor has been desirable for a long time - look at the used prices of the HP Joordana which is too small. Flash memory makes a minimal notebook form factor feasible - I would have bought the Foleo because it was just a bit thinner. In fact I think they all made a marketing mistake - they should have brought this form factor out further upmarket. I'd happily pay $1000 for a really nice execution with plenty of RAM and flash storage and expect them to ask $15-2K initially.

XO Tablets for Sale

Buy Your XO Tablet on Amazon.com
OLPC is selling the new XO Tablets on Amazon.com for just $149. Buy yours today!

xo-tablet-amazon.jpg

Discussions

Recent Comments

Community Forum

Close