It's Nail-Biting Time at OLPC, Waiting For XO-1 Orders

   
   
   
   
   

Where is Brazil's XO order?

We are in the most difficult phase of the OLPC project right now. The hardware and software development process was amazing. I have never been involved in anything so productive.

But now that the initial design is done and production has started, we have begun the nerve-wracking wait for enough initial orders to sustain production and make OLPC a going concern.

OLPC Sales Process

Nicholas Negroponte has admitted that he was not clear enough on the difference between a handshake with a national leader and a signed contract. In most countries, the difference is an appropriation by the legislature. Every salesman has to learn this distinction early. When the customer says Yes, you might have about a 50% chance of the sale.

When all of the details have been hammered out, you might have a 90% chance. Even when the contract is signed, you don't necessarily have a sale. The customer can still tear up the contract or take you to court, in cases of fraud or major cross-cultural communication failure.

Well, we don't expect any torn-up contracts. The buyers can now see and test the hardware and software, and talk to students, teachers, families, and governments involved in early trials. The XO is a model for cultural sensitivity, after a few early glitches.

olpc production keyboard
Keys to local OLPC purchases

For example, In initial trials in Latin America, it was discovered that only ASCII characters were supported for user names, so many children could not enter the accented letters in their names. Correct Unicode-capable code was patched in post-haste, and now children can enter names in Arabic, Cambodian, and Thai, among others.

XO Purchase Orders

We are starting to hear stories of purchase contracts for XOs. The first story, from Peru, turned out to be premature. It turns out that in spite of an official public announcement, the legislature has not in fact appropriated the money.

The second announcement, from Uruguay, is only for 100,000 units at first, scaling up to 400,000 over two years if all goes well. This makes sense, since Uruguay is a small country with only about that many students.

There are varying stories about how many Quanta needs to produce in order for its costs to be below the price quoted. The number may be three million or five million in the first year, as far as the public knows. That means that OLPC needs something like a quarter to a half million units ordered per month, on average.

Sales of new products usually start at modest levels and accelerate. We can't expect to start off at breakeven. If we can start at even a few hundred thousand a month, and work up to a million a month in a year's time, we're fine. But we won't know that right away.

The Give One Get One program has a week to run, with computers apparently going to Haiti, Cambodia, Rwanda, and Afghanistan. Maybe when the G1G1 results are in we will have a slightly better idea of how things are going. But not much better.

I think it will happen. Some others will confidently predict failure. Regardless of our opinions, it's nail-biting time.

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13 Comments

Dear Mr

I live in Brazil, where the first development project in the world (Year 2001) LapTop for education of children as you can see the link

http://www.youtube.com/watch?v=QHyy9u3FfgM

http://www.slideshare.net/secret/zU4e7VF47VogYn

We have a Big experience 2 years, but my government does not invest in ideas developed here.
But our project is global and can help the world to be a little better, our project is hardware and very educational software.
With this humble email hope that I help bring this project to the
world, need to investors

Thank you very much

José Evangelista Terrabuio Jr
www.e-duc.com Partner
e-mail [email protected] [email protected] [email protected]

"""I think it will happen. Some others will confidently predict failure."""

And some others would have loved to buy some, to spread the word around and contribute to the XO success.
Unfortunately this is not possible with the current limited distribution scheme.
http://lists.laptop.org/pipermail/olpc-open/2007-November/000225.html

Want to buy an XO and help OLPC 'goals'? Your only choice might be this (outside US/CA and everywhere in a week) ...

http://www.rm.com/Primary/Products/product.asp?cref=PD1030046

:(

Edward said "The first story, from Peru, turned out to be premature. It turns out that in spite of an official public announcement, the legislature has not in fact appropriated the money."

Do you have any confirmed sources for that information or where are you taking it from?

Thanks,
Christoph

Denmark is a small country in Europe with a population of about 6 million. Tomorrow the new government is expected to announce that Denmark will be giving 1% of BNP to the developping countries, same % as before 2001, and up from 0.8% since 2001.

I calculated that if Denmark was to give all of this 0.2% raise to OLPC, that would pay for 3.6million XO-1 laptops. That is 0.2% of a small country as Denmark's BNP is as much as more than half its population in XO-1 laptops.

If Denmark only gave 0.02% to OLPC, that would still pay for 360 thousand XO-1 laptops. All that many children in developping countries that might have a better future and a digital divide that is solved for so many people. And it just is a small country like Denmark, that needs to step up, announce and sign the check, for it to convince all the other developped countries to do the same.

About the Peruvian acquisition: the first group, of 40.000 computers, has been approved as an extension to this year's budget. The next one, to reach 250.000, is to be included in the full budget for 2008, that has till December 15th to be passed into law by Peru's congress. It should be approved in time, but as you might gather, the full budgetary process is complex and usually finishes at midnight of the last possible day (they even stop the clock to avoid going over the constitutionally set date).

Negroponte must be out of his mind to try to stifle the commercial success of his laptop now, when all odds are in his favor. All he (or Quanta) has to do is produce a different color lid for the commercial version!

I am personally a software developer from a country with well under 1 million pupils, drooling over a rugged laptop with 10h battery time, but at age 32 I do not qualify for XO, even if I have those $400.

If Negroponte is proud not to be in business, he should delegate marketing, not software development, to the third world children. Otherwise he will just be forced out of business.

Owner or customer is above even the director or CEO of a company. God is the ultimate customer, who pays for everything. By neglecting the customer, no business can last.

We see in Amazon that ASUS is selling out of stock their EEEs http://www.amazon.com/ASUS-Eee-Notebook-Pearl-White/dp/B000Y33CVM
, which are significantly inferior to XO by their battery life, screen technology and durability. Instead of idly letting competitors eat him out of business, Negroponte or whoever is in charge at OLPC should capitalize on their (yet) advantageous position.

2 Watt ultra portable laptop at $300 is an instant hit and will stay so for several moths at least. 10h battery life is unparalleled and transflective screen is rivaled only by $3000 Toshiba Portege R500. Large writing pad and built-in camera will be appreciated not only by children but also by business people. Extended wireless range could not hurt either.

Software will not be a problem, as long as the computer is open for 3-rd party developers and physically available to customers. Just like Microsoft is throwing nontrivial money at porting Windows XP to XO, other developers will throw their world-class expertise.

There are enough prospective non-bloated OS-es in the market and opensource that would benefit from symbiosis with a $300 ultraportable laptop, including AROS, QNX, SkyOS, Linux, Rockbox etc. I am personally developing a non-bloated OS "DevOS". Linux already comes complete with the relevant business applications.

Negroponte has been shy of the XO specs, but don't be! In year 2007 I am using a PII-300 Thinkpad with 192Mb RAM, and it can do everything, including DivX movies! I only wish it had more than 800x600 screen, more than 4min battery, more than 1 USB port and RJ45 ethernet - and XO has it all (except WiFi instead of RJ45). I still use it alongside 3Ghz desktop, for many purposes.

Another testimony to the power of opensource is my half-broken Archos Jukebox Recorder20G with 11Mhz SH CPU, 112x64 1bit LCD and 2Mb RAM, which I sold for $150 last year because it could run Rockbox! XO exceeds all of its specs by a large margin, battery time alone by a factor of 3, and SDHC slot is adequate (instead of an upgradeable HDD);

In order to secure success for the XO laptop, it is important to get it out in large numbers fast, just like Nintendo Wii did. You can see, that now they are indeed winning over developers and still selling at maximum speed. Riding on the back of commercial success, Negroponte will have much more freedom to implement his educational program as he pleases.

So, in order to unleash the XO laptop, we could:

1) delegate marketing, distribution and support to strong 3rd parties, so that they get the profit, but OLPC gets the orders, fame and freedom from hassles. Try Amazon. Try AMD-their future might be tied to the success of XO;

2) delegate software development to 3rd parties, both commercial and free open-source, any OS, business apps, multimedia players, recorders, communications, research, education, personal information management, network testing, all kinds of apps. OLPC can get the fame, orders and concentrate on just educational apps and Sugar;

3) produce a different color lid for the commercial version. This is the most important step, and I can't believe it is difficult. Separating business users from children is good for both, it gives esteem to the first (I would suggest a black/brown lid), protects the latter from theft and gives a peace of mind to Negroponte. RJ45 jack would be nice, but USB2 is already enough for a decent docking-station.

4) build developer community with high ideals. This can be delegated to RedHat. Actually this is already done, what I mean is - don't be shy of business/entertainment/research/other development targets, unleash the power of XO to its full potential!;

5) act now! Otherwise, in three months time the less timid business professionals from other companies wil just stampede over the XO.

I agree with Valdis 1000 percent. A lot of people who would be potential buyers of this product haver never heard of it. When they see one at Starbucks 6 months from now they'll want one and then what? Sorry, you can't buy this but Asus has something like it. Kindle is something like it.

Apple will have a $500 version that people can't buy fast enough. How does any of that help XO? If they let anybody buy one the first people to buy it will be developers, who will generate content, content OLPC never imagined. That will drive the next round of buyers because some people need to know what they're supposed to do with it. Once it gets in the hands of older kids (15+) they'll start to generate content.

In the video of kids disassembling the XO didn't the handles come off? How hard can it be to throw another color dye in the vat, somewhere I saw a chart where they plan to use different color handles for different countries anyway so they could make a white/grey/black on white version for adults.

Renting a warehouse somewhere (in any port city), slapping a shipping label on the box and waiting for the FedEx man to pick up and deliver the package is not that hard. What til the Ebay types get their hands on some XO's and NicNeg will see how efficient product distribution can be. Wait til they show up in the hands of their proper demographic, 14-25, who have de-kiddified them with spray-paint, and you'll see how a market is developed.

Every piece of general marketing for this I've seen shows it as an educational tool for very young children. If that's what they're selling people need to know if they'll get it by Christmas.

Over on Business wire, I saw that the give one get one program has been extended until DEC 31st. the article link http://www.businesswire.com/portal/site/home/index.jsp?ndmViewId=news_view&ndmConfigId=1000001&newsId=20071122005019&newsLang=en

You'd think they'd update their website (laptopgiving.org) with this new information and perhaps estimated shipping dates.

With an average revenue of $2 million per day for G1G1, that is 100 thousand XOs sold through G1G1 in 10 days. Half of these going to developping nations.

Valids and Maggie, the complete hardware and software of the XO is open-source, and all innovations of the XO are patented but totally available for licencing (revenue goes to OLPC foundation) to any competitor. Any of Dell, Apple or Asus are welcome to take the screen technology, the wireless technology, the battery technology, the low power CPU technology and everything else about it. WalMart could make a commercial version tomorrow, mass produce it and sell it for $300.

The only restrictions to using OLPC hardware or software for commercial alternatives is that CMO has 1 or 2 year exclusivity on manufacturing the screen technology and I think Quanta and Marvell among others also have some kinds of exclusives. The reason for those exclusives is because they invested billions in making the factories required to produce those new technologies. But Dell, Apple and WalMart anyways are already using Quanta, CMO and Marvell for their current laptop productions anyways.

The exact XO design should not become commercial cause OLPC doesn't want there to be a black market for these or for the parts of it.

So when WalMart makes a commercial version of the technology for $300, they can just make sure the screen is larger, the keyboard can be adult sized and doesn't need to be sand-proof and other things such as EVDO or HSDPA could be built-into a commercial version. This way the XO cannot be used commercially but there would be commercial alternatives using the same low cost, low power technologies.

Charbax,

Thanks for the information, I wondered why somebody else couldn't just steal the design and leave OLPC out in the cold. At least PLPC gets a licensing fee.

José, I have been creating educational computers in Brazil since 1983, so you can say our experience in this area goes back before 2001.

Edward, it would be illegal for Brazil's government to simple order a bunch of XO's. They have to publish an international call for tenders open to anyone. Earlier this year the education ministry had indicated that they would make such a call to buy 150 thousand laptops in mid October, which was later pushed back to mid November. I have not heard anything about this recently.

Sorry, Charbax, not even Walmart can get margins low enough to sell a computer costing more than $200 to make (with the additional hardware you specify) for less than $300. Normal manufacturing, distribution, and retail markups make the retail price several times the production cost for all electronics.

It is possible in principle to make a computer for less than $100, and sell it for $299. But it will not have the XO's screen, it will not be as rugged as the XO, and it will have less capacity and probably less speed. But commercial development of such a product for an unproven market is not yet possible in any for-profit company.

At least, that's what my 17 years in high-tech market research tell me.

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