OLPC XO vs. Intel Classmate PC, a Beneficial Competition

   
   
   
   
   
intel vs olpc
OLPC XO or Intel Classmate PC
In recent weeks, Nicholas Negroponte has started to publicly bemoan the efforts of Intel Corporation to sell its Classmate PC. Negroponte says Intel is waging a "war" on One Laptop Per Child by specifically focusing its sales efforts on OLPC's participating countries.

In his 60 Minutes interview, Negroponte says that "Yes, Intel has hurt the mission enormously," while in a recent lecture at MIT he accused Intel of trying to sell Classmates below cost just to dissuade governments from committing to OLPC. Professor Negroponte's summation of all this?:

"Intel should be ashamed of itself. It’s just – it’s just shameless."
Actually, no, Dr. Negroponte, its not shameless at all, its competition. Beneficial competition for everyone involved: OLPC, Intel, and the developing world.

First off, the pressure from Intel has made OLPC more responsive to government realities. Gone is Negroponte' arrogance around only dealing with heads of state and only for one million unit orders. He is now more open to different stakeholders and more manageable laptop lots. Gone is a Constructionist focus from the OLPC mission statement, replaced by a new-found focus on educational content.

olpc classmate linux
Dual Linux operating systems

Next, Intel is engaging in the All-American game of catch-up to the OLPC thought leadership. Intel is increasing its focus on the developing world as a real market, by developing new computing products like the Classmate PC. It is also centering the World Ahead program on the developing world outside of India and China. Last but not least, OLPC has broken Intel from its Microsoft myopia, spurring a Linux Classmate PC.

Now the real winners in this competition are the people in the developing world. Two or three years ago, neither Intel nor AMD considered them a worthy market to develop product for. "Emerging markets" would get the developed world's end-of-life products, seconds that were soon to be obsolete. Now these economies, especially their educational technology industries, are about to leapfrog into the future with clock-stopping hot technology.

And leapfrog with more than just Intel, AMD or OLPC, too. Brooke Partridge, CEO of Vital Wave Consulting, in a Tech News World interview, says:

If the OLPC and other such efforts can effectively produce low-priced machines, the overall educational computing market will see an overhaul. Some PC makers will worry about low-cost devices cannibalizing their established markets, she added, saying what works in emerging economies won't always work in mature marketplaces.

"Developed-world manufacturers should not perceive this as a threat," she said. "This shift presents opportunities for traditional PC manufacturers."

So no matter what happens with One Laptop Per Child's Children's Machine XO, Intel's Classmate PC, or even Mobilis, the end result of the OLPC XO vs. Intel Classmate PC global sales effort will be a radically different educational IT landscape: the bottom of the pyramid with have top of the line technology.

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24 Comments

XO-1 has been long enough on the way, delayed more than 6 months because of the AMD Geode LX-700 and RAM upgrade to accomodate full-screen video playback, smooth flash video support and to be able to run a thinned down Windows XP or OSX in the future using the SD card slot.

Now all Negroponte needs is about 3 million orders to be able at all to launch the mass production of the first generation XO product.

Intel, desperate and aggresive as they are, does not want that to happen. So Intel is sending their lobbyist to all the governments that have been discussing Negroponte, and Intel is there to try and attract law makers into illegal dumping of the price of low volume shipments of the Classmate.

Intel probably does not want to dump the price on 3 million Classmate PCs. Their offer to the governments probably is more like 10s of thousands of units max per country at a price of 180$ each (5$ more than OLPC). Intel can produce 10 thousand small laptops with a probable 200$ loss on each of those, that's a 2 million dollar gift from Intel.

On top of price dumping, probably that Intel has their lobyists also pressuring the different governments with other unethical tactics. Like thretening by Intel to canceling other ICT investments in the country like I would imagine could have been part of the Intel lobbying activities in India and Pakistan thus far. Intel has a lot of things going on in all of the countries in question, and Intel has a lot of big plans for future development of sales and production in those countries, which is not a bad thing. But it is a really bad thing if Intel thinks it should be able to threaten countries on penalisations and canceling of ICT development projects not related with the One Laptop Per Child philosophy.

Simple calculations for making One Laptop Per Child a reality is as following:

Number of XO-1 orders needed to be able to at all request mass production of the different components involved (screen, chips, wi-fi mesh and more):

3,000,000 units at 175$ each = $525M

Minimum number of computer orders per country:
250,000 units at $175 each = $44M
(in the case of 4 countries in south-america joining together under the Latin American Development Fund to obtain the combined 1 million launch units)

Now Intel's proposition to all the same countries probably goes as follows:

10,000 units at $180 each = $1,8M
With a probable loss to Intel of at least 200$ per laptop ($2M) at this low volume and because Intel proposes to pay for assembling them locally.

Now Intel's argument probably goes like this:

"Comon [put-in-name-of-OLPC-launch-country], you shouldn't need to invest $44M or $176M in the XO-1, which is an unproven technology, when we can make you 10 thousand Classmates for much less, that we suggest you to test in this quantity for a few months or a year before committing to larger orders."

In this argument, Intel does probably not provide a contract on the price for large orders for 250,000 or a million units. Nor is there probably not any offer from Intel to invest in Educational software or any technological advances in terms of lowering the cost and improving the power managment, screen quality or internet connectivity for future units (other than Intel might want to impose their version of WiMax). Which Intel probably would not provide for less than twice the price that the XO-1 would cost to mass produce.

But hopefully that the heads of state in question will know better as to be bothered by the Intel proposition. Since Intel's proposition is unsustainable and does not sponsor technological innovation in the field of low cost educational laptop hardware and software development.

Low cost, low power and open source is the enemy of Intel and Microsoft.

Intel and Microsoft prefer higher cost and more power. Intel uses Moore's law in the way people should buy twice as fast processors, consuming more energy and for more money every 18 months, instead of building twice as cheap computers every 18 month and adapting thin software to run smoothly on such fixed low specs sufficient for running a Browser and other basic computer tasks 95% of the people need.

In fact I would say Intel's Microsoft-based myopia was broken when it started to supply chips to Apple...

This is my perspective: let's give mr Negroponte / MIT / many others a little more credit then in this article, because if it weren't for their combined effort - the people at some (most?) big companies still wouldn't work on innovation, and products that *could maybe* help bridge the gap between so many people in the world....

In my view the OLPC project is the first in many years to experiment with really new ideas: I see parallels between the transition from the Stone Age to the Iron Age. It looks like many commercial ventures would have us stay in the Digital Stone Age (is history repeating itself?!).

My bottomlines are: let's start using all this energy lost in debate, and really kick some ass to help the poor and underprivileged.

And it's not a one-way-street either: there's a lot to learn from people with less material goods.

A simple fact. OLPC is a no-profit. Intel is a business, looking for profits. I see Negroponte's frustration as real. Intel would have never entered this business if the OLPC was powered by Intel (instead of AMD). It's not what healthy competition is supposed to be. I read this very illuminating post on slashdot:

"Competition is one thing in a regular market, but the accusation is that Intel is using their marketplace power and financial reserves to undercut a not-for-profit to force them out of the market as part of their corporate rivalry with AMD, who supplied the CPUs for the OLPC machines. That's something different from healthy competition."

This is not about competition. Intel is hurting the children in the third world, by trying to push first world hardware/software in those countries.

With a screen that can be read in sunlight, a manual charging device, a innovative desktop and open software, the OLPC is a much better approach than just calling a first world laptop "Classmate", using bloated software and forcing governments to buy it.

I think the author of this article has worked for Intel, hasn't he? When I typed "OLPC" into Google yesterday, I got an ad from Intel on top of the search results! That's what I call unfair competition.

John Edson,
I doubt that Intel is fighting OLPC primarily because their chips are not on board the XOs. Negroponte asked them to join OLPC but they turned him down. Why? Because Intel is not specifically against the XO. It is against the whole concept of lean computing.

If Intel cannot deliver ever faster, stronger CPU's their whole business model will collapse. If people around the world and worst of all in the first world realize that they can do all their work on lean, cheap computers just as well they won't buy expensive ones anymore. And in the market for lean computing CPUs there are more players than just AMD and Intel. Also China has their Godsen-2 CPU for that market that sure will be cheaper than Intel. So Intel will finally loose customers changing to lean computing to foreign competition.
Recently I worked again with an old Pentium 1 Win98 computer. Wordprocessing is just as fast and reactive as with the latest office program under Vista on a dual core CPU. The last three generations of computers have simply brought no progress for office work just for gamers. Actually most companies could easily do with lean computers at much lower cost. Intel fights against loosing this part of its business.

"This is not about competition. Intel is hurting the children in the third world, by trying to push first world hardware/software in those countries."

The real question is:
Will Intel push the Classmate with $1B in subsidies if the OLPC project fails to get enough orders?

All the talk about "competition is good" only works if the best wins and stays. But if the winner withdraws immediately after the competitor fails, the children are left with nothing.

And neither the behavior of Intel, nor the comments of the CEOs, convince me that the Classmate will be a real alternative. I still see the possibility that it is the XO or nothing.

Please, convince me Intel will deliver even if the XO is dropped.

Winter

Well, I´m a Brazilian taxpayer. It is *my* money that is going to pay for this. And I welcome competition. I want to get the best educational value for my money.

Frankly, I don´t give a damn if XO is a "non-profit". If a "for-profit" gives our children the best value for less money, so sorry Mr. Negroponte. My money should be spent to improve education for our children, not to reward Negroponte´s good intentions.

This is NOT true Intel like all other big companies work on putting the people out of business (DUMPING)and then Jack the prices of there products once they have wiped out the others in the market place. IE look AMD, Cyrix ... can no longer make chips for Intel Motherboards .. So NO competition but... if you can not beet them in the market place beet them in court...

This is NOT good and NOT good for the poor people or the Market place ... See the tree in front of your face before you see the stop sign one mile away ...

Multiply companies working in the same market is good, but dumping is NOT ...

The cost of the Classmate is closer to $400. Though Intel is offering only to OLPC launch states in maximum bunches of 10 thousand units at $180 each. Thus Intel is taking a $220 loss per laptop. Intel will only sell at that price in relatively low volumes, you can be sure Intel won’t commit to deliver a million laptops per country at that price.

I have tried both at http://olpc.tv (even though those I tried at consumer electronics tradeshows during the past year were not the latest versions). I can tell you that while OLPC XO-1 is 100% made of innovation, the Classmate is nothing more than a lower spec conventional laptop with an Intel ULV processor (like the one in the UMPCs) and with a 2GB flash memory instead of a 20GB HDD (which doesn’t cut price more than about $30). Intel might as well give out low spec full screen and full keyboard sized laptops in batches of 10 thousand units, it wouldn’t cost Intel much more. What Intel is doing is making people think that the Classmate is innovation, just because it’s the same size as the OLPC XO-1, while Classmate is 0% innovation.

OLPC XO-1 is better in terms of power managment (12h battery life with backlight and heavy use compared to 2h battery life on the Classmate, the Classmate consumes nearly 10 times more Watts per hour of use), the dual-mode high resolution screen of the XO-1 is sunlight readable and usable for e-books (Classmate is just a conventionnal and expensive 7″ LCD, just like the ones on the expensive UMPCs) and the software of the XO-1 is made for education and is full of innovation for that use, fully open source thus constantly being optimized and new location specific apps can be added (while Classmate is nothing but a normal laptop running Windows XP, Intel did nothing to improve or adapt any educational software for the Classmate running Windows XP, the Classmate comes with no other educational software than what is currently available on Windows XP and on the Internet).

OLPC XO-1 can run Windows XP, but Microsoft has on purpose not wanted to confirm that, because Microsoft also is hoping that OLPC XO-1 will not start mass production as planned. But you can be sure that XO-1 hardware can support a customized slimmed down Windows XP and OSX, once it is mass produced, you can be sure that Microsoft and Apple will be able to relatively quickly deliver those customized unbloated and free-licenced or $3-licenced OS to the OLPC schools on a 1GB SD card.

I just think back to the original OLPC mission and wonder what is the real aim here.

"We are non-profit: constructionism is our goal; XO is our means of getting there. It is a very cool, even revolutionary machine, and we are very proud of it. But we would also be delighted if someone built something better, and at a lower price."
http://www.olpcnews.com/use_cases/education/olpc_mission_constructionism.html

Now reading that, you'd think Negroponte would be happy with more low-cost options, not fewer. Or maybe its his ego that is threatened by computing competition.

"Now reading that, you'd think Negroponte would be happy with more low-cost options, not fewer. Or maybe its his ego that is threatened by computing competition."

That is the real point: Do we get MORE low cost options, or is Intel only in the game to spoil the market.

The Classmate will only increase the number of options if Intel continues to support it after they eventually succeed driving the OLPC into bancrupcy. But the current signals are all pointing towards Intel withdrawing from the market as soon as the XO is driven off (low volumes only, dumping, etc.).

There is no real commitment from Intel to this market.

Winter

The positive side of Intel's engagement is that OLPC cannot afford anymore to be arrogant and leave critical questions unanswered.

The negative side is that Intel's Classmate might not be a valid competitor since there is the possibility that it really is not meant to help children in large quantity but only to prevent the launch of XOs and with it the growth of a large lean computing market that is opposite to Intel's business model.

> Now reading that, you'd think Negroponte would
> be happy with more low-cost options, not fewer.
> Or maybe its his ego that is threatened by
> computing competition.

Classmate is not a low cost computer. It really costs $400 and not $200. Intel is not planning to produce large quantities of the Classmate.

On top of that Classmate does not provide any innovations at all, since its battery life is nothing special compared to conventionnal laptops, its Wi-Fi is not improved over conventional Wi-Fi and its software is just plain Windows XP with no educational software made especially for the project.

from the post: "Two or three years ago, neither Intel nor AMD considered them a worthy market to develop product for."

That's not entirely true given that AMD announced their Personal Internet Communicator (PIC) back in October 2004.

Of course the project never really took off and was canned earlier in 2007.

For Intel on the other hand the Schoolmate PC is indeed their first real product aimed at the emerging markets.

Regarding the discussion about Intel vs. OLPC raging in here: I have more trust in a not-for-profit foundation doing something to improve education in poor countries than in a corporation who's sole purpose as an entity is to please its shareholders. 'nuff said.

Hi Wayan:
You are director of Geekcorps, which has a formal business partnership with Intel.

This is from the Geekcorps web site:

"Geekcorps has partnered with Intel Emerging Markets Group in Intel’s “Discover the PC” initiative focused on delivering products and technologies that are specifically designed to meet the unique needs of people in emerging markets."

Don't you think that this is a conflict of interest that should be disclosed?

Full disclosure on my part: My firm does pro bono PR work for OLPC.

George,

Please read the About OLPC News page: "In addition, the opinions of contributors or commenters expressed here are theirs respectively and do not represent the views or opinions of their employers."

Now -if- I were to comment on my employer, it would be to laugh at the concept that Geekcorps has a "formal" relationship with Intel. Geekcorps works with _every_ major IT company that will listen to develop appropriate technologies for the developing world. In that role we often tell Intel they should be more like OLPC, and developing clock-stopping hot technology wonderfully suited to extreme conditions.

Sorry, Wayan, but that is a weak argument at best. You are expressly writing about Intel and OLPC, yet have failed to disclose your relationship with Intel.

Your organization has a formal partnership with Intel which is noted on your Web site. Does Intel fund Geekcorps in anyway? Does it receiving funding and resources from Intel?

This web site is like a consultant working for Dunkin' Donuts starting a Starbucks News blog and claiming to be an independent source.

Why don't you write a post and clearly outline your relationship with Intel? I'm also curious if you informed "60 Minutes" of this relationship.

George, about Wayan "conflict of interest":

There has been many allegations in this site about the apparent conflict of interest, and in every case the relationship between Geekcorps and Intel has been raised. Looks like it is well known, as the Geekcorps site states clearly. A few visitors here have been concerned about OLPC being a capitalist plot designed by the CIA / US intelligence community, through the unholy Negroponte brothers work; following your lead, Geekcorps dependence of USAID would be a clear tipoff to the aforementioned capitalist plot, sort of shaded by the apparent dislike that Wayan and others are trying to present about the OLPC.

Also, many others are stating their opinions freely, including myself, and I do believe there's no hidden agenda here.

Unless you are intending to state that Wayan is trying to fool all of us into falling for Intel's plan (in other words, that Wayan is actually a crook instead of a geek) what is exactly your goal?

Again with this George? Your line of reasoning is getting old. Should we discredit your conspiracy theories about me because you do pro bono work for OLPC helping them market their product?

Or will you one day realize that the _informal_ relationship that Geekcorps has with Intel is to tell them to be more like OLPC in their technology and that OLPC News does not reflect the opinions of any of its contributors' employers?

Actually, Eduardo has a point. I actually work for Negroponte's brother, since he is Undersecretary of State and Geekcorps is USAID funded (and not a dime from Intel) which means, if anything, I must be part of a ex-CIA and now State Department plot to overthrow the other Negroponte.

I better get on the ball then, eh? I'll need to get some dark glasses, a trench coat and at least two buckets of FUD!

Some people here see the real point - others, like "Fernando" from Brazil are brainwashed fools, pure, and simple.

Intel's move is not about "competition" - what "competition" can there be for a non-profit like OLPC? It is about seizing and burying an idea that is anathema to most capitalists - the idea that people and corporations should be socially and environmentally responsible and responsive in any way.

We have seen this play out many times - a classic example is the Pacific Electric Railway (aka Red Car or Red Line) in LA - it once ran all over LA and many other areas, and provided cheap, reliable, non-polluting mass transit, and was one of the best and most advanced public transit services in the world.

Like all affordable public mass transit systems, it seldom operated at a profit. It was developed and supported mainly by the Huntingtons who had large real estate holdings, because it allowed them to develop and sell their real estate in suburban areas in the era before personal autos.

However, as the car and oil industries bloomed, they made haste to remove the Red Line and other mass transit in order to force more people into buses and autos made or powered by them. National City Lines, a consortium of General Motors, Standard Oil, and Firestone, bought up private streetcar lines across the country and systematically dismantled them, replacing electric trolley service with internal combustion buses in the "Great American Streetcar Scandal." In 1949, a Federal Grand Jury in Chicago found GM, Standard Oil, and Firestone guilty of having criminally conspired to replace electric transit systems in 45 cities with buses, and to monopolize sale of buses and related products.

This is what you can expect from Intel and Microsoft (who also bailed). They aren't into "competition" - they HATE competition which is why Microsoft in particular has spent millions buying competitive products or operations (where possible) or using their clout to try to beat them to death. (And why MS is and has been involved in major lawsuits for monopolistic practices world-wide!)

Nor are they into bettering the product, or the lot of children - they are into profit, pure and simple, and have no scruples about accepting short to intermediate term losses in order to wipe out an inexpensive, easy to run and use, open-source computer.

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