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One Laptop Per Child Program Threatens Dominance of Intel and Microsoft

Kim Dian Gainer, Radford University

Overview

For the past three years, several companies and organizations have been competing over what model to follow in making computer hardware and software available to primary and secondary students in the developing world.  The outcome of this competition may have a serious effect upon the question of whether open source software will make inroads against the Microsoft operating system that is installed in the vast majority of computers.

Background

In 2005 Nicholas Negroponte, co-founder of the Massachusetts Institute of Technology Media Laboratory, announced the formation of the nonprofit One Laptop Per Child (OLPC) Foundation, an organization dedicated to the goal of placing a low-cost laptop in the hands of each child in participating developing nations.  The foundation proposed to develop a rugged laptop that would be sold in bulk to nations that would distribute units to individual students.  It was the intention of the foundation to keep the cost of each unit in the range of one-hundred dollars.  That goal was not realized, and the projected price of each unit was approximately two-hundred dollars when mass production began in November of 2007.  However, the technical goals of the project have been met.  The XO (if you turn the logo sideways, O upwards, it is supposed to look like a child with limbs outstretched) is based on an Advanced Micro Devices processor, and its software, provided by Red Hat, is a version of the open source—and free—Linux system.  Built in are a camera and microphone, and it comes equipped with a memory-card slot, a graphics tablet, and a game-pad controller.  Its screen rotates so that it can be used as a tablet.   It is enabled for both Bluetooth and Wi-Fi, and even in the absence of an internet connection, the computers link with each other as part of a ‘mesh network’ that is established automatically whenever one XO is turned on in the vicinity of another.  (The internet connection is also automatic.)  It is light, weighing a little more than three pounds, in part because the need for a fan has been engineered out of it.  Its battery will last for six hours and can be recharged by a pull cord.  Both its screen and the system by which it is powered incorporate what many industry analysts consider to be breakthrough technology.

However impressive its technological specifications, foremost in the minds of the developers was the need to make the laptop suitable for use in developing nations.  The XO was designed to be energy efficient because it is intended for use in a market where electricity may be limited.  It also was designed for an environment in which conditions may be harsh and technical support lacking.  It has a sealed keyboard and is intended to be spillproof and impervious to rain and dust.  It may be dropped from a height of five feet without suffering damage.  Impressed by its suitability for use by children in developing nations, the Smithsonian’s Cooper-Hewitt National Design Museum included the XO in its exhibit of affordable inventions intended to address Third World needs in the areas of shelter, health, water, education, energy, and transport.

The Struggle for Market Share

Initially, the technical appeal of the XO was not sufficient to entice many nations to participate in the project.  When mass production began, the OLPC Foundation was certain of only one order: 100,000 units destined for Uruguay.  To achieve the necessary economy of scale, the Foundation then adopted a “get one give one” model that was in force for the final two months of 2007.  Consumers in developed nations would purchase two computers for four-hundred dollars, one to be delivered to the purchaser, the other to be delivered to a student in a developing nation.

In the opinion of some observers, developing nations may have been reluctant to order the laptop because for-profit companies were actively seeking to discourage the mass adoption of an open source product that was not Windows compatible and did not rely upon an Intel chip and thus had the potential to devalue proprietary software and hardware.  For companies such as Windows and Intel, the stakes may be very high.  The potential market targeted by the OLPC program is huge, consisting of two billion students in developing nations.  If the OLPC program were to succeed in placing low-cost laptops in the hands of these children, for-profit corporations would not only forfeit immediate sales of laptops and bundled software; the students participating in the program might grow into adult consumers familiar with alternatives to Windows software and Intel chips.

For-profit companies, in particular Microsoft and Intel, appear to have taken a three-fold approach toward discouraging the mass adoption of the XO.  First, industry spokesmen ‘talked down’ the project.  Craig Barrett, the chairman of Intel, was quoted as calling the XO a “$100 gadget” (Johnson), and Microsoft’s Bill Gates repeatedly raised doubts about the suitability of the XO for children in developing nations.  The most egregious incident, however, probably took place after Peru agreed to participate in the program.  Shortly afterward, an Intel representative visited a Peruvian official and roundly criticized the XO—this in spite of the fact that Intel had only a few months prior signed on to the project and pledged financial support for it.  This incident caused a bitter public breach between Intel and the OLPC Foundation that included the resignation from the board of the Foundation of an Intel executive who had taken a seat on the board only a few months earlier. 

Companies have also introduced competing laptops.  Asus Computer International of Taiwan has had some success with individual sales of its Eee PC, sold at prices that range from two-hundred to four-hundred dollars, and reports that it is in negotiations to sell bulk orders to governments in both developed and developing nations.  The Eee PC is a retail brand of Intel’s Classmate PC mini-laptop that is being sold at a price of between two-hundred and three-hundred dollars.  Unlike Asus Computer, Intel markets the Classmate PC only to governments, educational institutions, and nonprofit organizations and thus has positioned its laptop as a direct competitor to the OLPC’s XO.  Moreover, OLPC’s Negroponte has accused Intel of offering the Classmate at below cost in order to undercut sales of the XO.

Finally, for-profit companies have sought to derail the project by offering software and services that encourage the purchase of competing laptops.  In certain developing nations, Windows offers governments and schools a software bundle at a cost of $ 3 per unit, turning its software into a loss leader for the sale of Windows-compatible hardware.  As for Intel, it has initiated what it calls the “World Ahead” program,

a strategy to increase the use of computer technology in developing countries. For example, Intel’s Rural Connectivity Platform project is working on ways to extend the range of WiFi wireless networking from a few hundred feet to a dozen or more miles. Such a WiFi system could deliver cheap Internet access to remote villages, and make it easy to put the Classmate laptops online. It would also give everyone in the village an incentive to buy more computers, most of them loaded with Intel chips.  (Bray, Nov. 14, 2007)

OLPC Fights Back

Negroponte had always been outspoken in defending the OLPC program, and following the revelation that Intel had sought to interfere with the Foundation’s contract with Peru, he went on a verbal offensive.  In addition, as mentioned above, the program initiated the “get one give one” program.  Advanced Micro Devices and Red Hat continued to stand behind the program, as did other entities, such as Google.  The Foundation entered into an agreement with the United Nations International Children’s Emergency Fund to place UNICEF-generated educational content on the laptops.  By March of 2008, orders of the XO were verging on the half a million mark.  Countries participating, in addition to Uruguay and Peru, include Rwanda, Thailand, Brazil, Mexico, and Mongolia.  Meanwhile, Intel has been unable to sell as many of its Classmates PCs as it had anticipated.  By the end of 2007, Libya and Nigeria had signed orders for approximately 170,00 of the laptop, but Intel has suffered significant bad press as a result of its attempt to sabotage sales of the XO to Peru. 

Implications

Interestingly, orders for the XO now include 15,000 for schools in Birmingham, Alabama.  Designed for developing nations, the XO has nonetheless found a small market in the United States.  This development may presage a long term threat to Intel’s and Windows’ dominance of the computer and software market in developed nations.  At the moment, however, the battle is for control of emerging markets in the developing world.  In a move that may be an acknowledgement that a low-cost open source laptop would interfere with its attempts to penetrate and dominate this market, Microsoft is now pressing the OLPC Foundation to modify the XO so that it will run Windows XP.  However, the requested modifications would raise the cost of the laptop, and the Foundation has declined to alter the design of its laptop.

In addition to raising the price of the XO, the requested modifications would run counter to the Foundation’s vision of children as independent thinkers in control of the learning environment.  The XO is designed so that children themselves can service the computer.  The battery, for example, is easily replaced.  Similarly, the Foundation has embraced open source software not only for reasons of cost but also because its transparency, it was hoped, would encourage children to create their own programs or modify existing ones.  As one reviewer wrote,

The OLPC is designed to follow the “constructionist” theory of education (where children learn by doing and experiencing), which means that its creators wanted every level of the machine to be tinkerable, explorable and configurable by a curious child. Both Microsoft and Apple offered their operating systems for free for the project, but were turned down in preference to open software that could be manipulated and improved upon by the OLPC’s own users.  (O’Brien)

That such tinkering within an open source environment may threaten the dominance of proprietary software was illustrated by a project undertaken by a group of hackers at the Twenty-third Chaos Communication Convention held in Berlin in January of 2007.  These hackers set out to enable an XO to play Flash content without the use of Adobe’s proprietary Flash software.  Among the group was Rob Savoy, “the creator of Gnash, a free reimplementation of Flash” that was “painstakingly coded by developers who’ve never agreed to Adobe’s licence [sic]” (O’Brien).  After several hours, Savoy and his compatriots were playing Flash movies on the XO without ever having installed Flash.  Not only would their additions to the XO’s open source software allow children to watch Flash; the modifications would also allow youngsters to create Flash-compatible content.

In spite of a recent upsurge in orders for the XO, it is much too soon to tell whether the OLPC Foundation will succeed in its goal of placing laptops in the hands of significant numbers of children in developing nations.  However, if the Foundation does meet its goal, the above scenario suggests that control over computer applications may shift as proprietary software is bypassed by users who create their own programs or modify existing ones.  For this reason, in the coming year, Microsoft and Intel will no doubt continue to battle to prevent the XO or similar open source computers from establishing a foothold in a market potentially so profitable.  

Works Cited

Bray, Hiawatha.  (2007, Nov. 14).  Cheap Laptops as a Money Maker.  While Group Wants to Give Them to Children, Two Firms Eye Profits.  The Boston Globe C1.  Retrieved March 1, 2008 from LexisNexis Academic. 19 February 2008

_____.  (2007, Dec. 1).  One Laptop Per Child Orders Surge; Peru Wants 260,000 machines; Mexican Billionaire Signs Up.  The Boston Globe D1.  Retrieved March 1, 2008 from LexisNexis Academic.

Cooper-Hewitt National Design Museum.  (2007, May 4–Sept. 23, 2007). One Laptop Per Child.  In Design for the Other 90%.  Retrieved March 1, 2008 from http://other90.cooperhewitt.org/Design/one-laptop-per-child.

Hille, Kathrin.  (2007, April 9).  The Race for the Dollars 100 Laptop: A Charitable Project Has Uncovered the Marketing Power of the Poor.  Financial Times (London) 1.  Retrieved March 1, 2008 from LexisNexis Academic.

Johnson, Bobbie.  (2007, May 31).  Which Laptop Per Child?  The Chipmaking Giant Intel is Accused of Damaging the Non-profit Scheme to Provide Cheap Laptops for the Developing World. It Says It’s Helping.  The Guardian (London) Technology Pages 1.  Retrieved March 1, 2008 from LexisNexis Academic.

Lohr, Steve.  (2007, Sept. 24).  Buy a Laptop for a Child, Get Another Laptop Free.  The New York Times.  Retrieved March 1, 2008 from http://www.nytimes.com.

Markoff, John.  (2007, Jan. 29). At Davos, the Squabble Resumes on How to Wire the Third World.  The New York Times.  Retrieved March 1, 2008 from http://www.nytimes.com.

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_____.  (2006, Oct. 11).  U.S. Group Reaches Deal to Provide Laptops to All Libyan Schoolchildren.  The New York Times.  Retrieved March 1, 2008 from http://www.nytimes.com.

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Naughton, John. (2008, Jan. 13).  A Little Green Computing Machine That Made Intel See Red.  The Observer (England) 12.  Retrieved March 1, 2008 from LexisNexis Academic.

O’Brien, Danny.  (2007, Jan. 12).  Child-friendly Laptop Project a Warning to Market. The Irish Times 7.  Retrieved March 1, 2008 from LexisNexis Academic.

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Pogue, David.  (2007, Oct. 7).  Laptop with a Mission Widens Its Audience.  The New York Times.  Retrieved March 1, 2008 from http://www.nytimes.com.

_____.  (2007, Oct. 4).  PC for the Poor is Useful for Everyone Else, Too.  The International Herald Tribune 18.  Retrieved March 1, 2008 from LexisNexis Academic.

Rush, Dominic.  (2008, Jan. 13).  Intel Suffers Bad Issues of Trust.  Sunday Times (London) 26.  Retrieved March 1, 2008 from LexisNexis Academic.

Schofield, Jack.  (2007, Oct. 18).  Is the £199 Laptop a PC or an Appliance? The Asus Laptop is More Than Just a Computer: It’s a Return to the Idea of the Closed Box and an Attempt to Get the Next Billion Users.  The Guardian (London) Technology Pages 3.  Retrieved March 1, 2008 from LexisNexis Academic.

U.S. City Might Buy ‘Third World’ Laptops.  Birmingham, Ala., Officials OK $3.5 Million to Buy 15,000 from Foundation.  (2008, March 5).  MSNBC.  Retrieved March 5, 2008 from http://www.msnbc.msn.com/id/23486845/.

Witchalls, Clint.  (2005, Feb. 17).  Bridging the Digital Divide: A $ 100 Laptop Aims to Bring Equal Technology Opportunities to Children in the Developing World. The Guardian (London) 24.  Retrieved March 1, 2008 from LexisNexis Academic.

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