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OLPC founder, Negroponte, has a few words for Intel on low-cost laptops

Nicholas Negroponte, founder of the "One Laptop Per Child" initiative, accused chip maker Intel of undermining the OLPC by selling its own cut-price laptop, the Classmate.  Negroponte claims that Intel is trying to drive him out of the market.

According to BBC, Negroponte said that Intel hurt his mission in trying to distribute laptops to kids in developing countries "enormously".  Intel's chairman, Craig Barrett, has denied all claims of undercutting Negroponte's mission, stating, "We're not trying to drive [him] out of business. We're trying to bring capability to young people."

Though the hardware specifications differ between Intel’s low-cost laptops and Negroponte's, OLPC founder believes that the main problem is that his machines use AMD processors, Intel's main competitor. "Intel and AMD fight viciously," he told CBS. "We're just sort of caught in the middle."

Professor Negroponte also claimed that Intel has distributed marketing literature to governments entailing negative aspects of the One Laptop Per Child and outlining superior aspects of the Classmate.  Some of the literature had titles such as "the shortcomings of the One Laptop per Child approach".  Intel responded by saying that it was just making comparisons between the Classmate PC and the other device in the market.

Countries have until May 31 to place their orders for the first round of PCs.  The launch price will be $175 but the goal is to get them down to $100 each.  Intel is taking orders for the Classmate for over $200 each.



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Economics 101
By rmaharaj on 5/21/2007 6:50:15 PM , Rating: 4
I don't see with Negroponte is whining about. Markets have competition. Complaining about it just tells people that you have an inferior product. Either you learn to compete in the marketplace or you're driven out of business.




RE: Economics 101
By stromgald on 5/21/2007 7:22:53 PM , Rating: 4
My thoughts exactly. If Negroponte actually got his laptop down under $100, he could argue to the governments that they could get two laptops from him at the same price as one from Intel. Just because this is a charitable initiative/organization doesn't mean that competition shouldn't happen.

I don't see why the AMD vs. Intel issue comes into play. Negroponte should welcome competition from both chipmakers. As long as it helps the children, should Negroponte be so fervently against it?


RE: Economics 101
By spluurfg on 5/21/2007 7:56:40 PM , Rating: 5
If I have my facts straight, Negroponte is doing this as a social endeavor. Hence, his goal is to provide the laptops at as little cost as possible. To do this, he needs to reach an efficient scale of production to benefit from economies of scale -- hence why it is $175 now but the aim is to hit $100 in the future.

Intel's entry dilutes the market and makes this more difficult. Sure, this is fair market practice and competition, but I don't think Negroponte was trying to get rich on this, where as Intel... is clearly a profit driven company. Perhaps he would have preferred if Intel had offered processors instead of creating a completely new competitor.

So ultimately, no this probably won't help the children. Worst case scenario: Intel's entry makes money for Intel, Negroponte may not sell as many laptops, and in the end everybody pays $175-$200 instead of $100.


RE: Economics 101
By Soviet Robot on 5/21/2007 8:13:22 PM , Rating: 3
If you're trying to do good without making money, you're not gonna be making laptop computers...
Laptops don't feed children, they don't cure disease, and they don't make their standard of living much better.


RE: Economics 101
By spluurfg on 5/21/2007 8:17:37 PM , Rating: 4
Laptops don't feed children, no... but simply feeding them doesn't always help them in the long run. Education, on the other hand, is usually correlated with a higher standard of living, and laptops are reasonable educational tools.

That's not to say that laptops would be incredibly handy for those who are starving, but maybe cheap laptops would be handy to non-widespread-famine/plague developing countries that have basic infrastructure but limited funding for education.


RE: Economics 101
By redbone75 on 5/21/2007 8:45:07 PM , Rating: 5
Give a man a fish, he eats for a day.
Teach a man to fish, he eats for a lifetime.

Remember that proverb?


RE: Economics 101
By sonoran on 5/21/2007 9:16:35 PM , Rating: 5
quote:

Give a man a fish, he eats for a day.
Teach a man to fish, he eats for a lifetime.

Remember that proverb?


Sure do. Over the past decade Intel has taught over 3 million teachers about the use of technology in the classroom (http://www.intel.com/intel/worldahead/education.ht... ), and is working toward teaching 10 million more.

Teaching starts with teachers - not with hardware.


RE: Economics 101
By jskirwin on 5/21/2007 9:38:18 PM , Rating: 5
quote:
Teaching starts with teachers - not with hardware.


Actually it starts with parents. Kids in South Korea, Taiwan and Japan have much less exposure to PCs in the classroom, yet they outperform US kids significantly in all subjects.

Children don't need technology to learn: they need parents who check their homework and pass along good, solid learning skills.

I'm all for techno fixes whenever possible, but when it comes to education, I'd rather kids read - and learned from - books.


RE: Economics 101
By hermitd on 5/22/2007 5:35:33 AM , Rating: 3
very true. I wouldn't compare the education i had in India with education here in the UK. We learned with teachers and not with computers yes there were computers but most of the teaching was in class rooms with a teacher and a board and a set of books and i think i turned out okay. i keep hearing people whin about education here is so tough on children. We had bloody tough education (we studied stuff in class 2 - 3 which is taught here in class 6 - 7 if not later).
Computers are a good learning too but there is a time and a place. Kids need to learn basics before getting hands on computers otherwise they will never learn know to write forget do multiplications / divisions the hard way.


RE: Economics 101
By Wonga on 5/22/2007 5:59:14 AM , Rating: 3
Very true. I've had first hand experience with teaching skills in the UK today (being a supplier of IT equipment to schools just over a year ago), and I can say without a doubt that a huge number of teachers use IT equipment to make their lives easier, not to give the children better education. Much of the time, the children are sent down to the computer cluster room and are told to browse some pre-built web site containing childrens' education programs. Whether this is down to the teacher's own personal decision to get away from actually engaging with the kids, or whether they are forced into giving the kids a load of hours a week in front a computer is unclear, but my honest opinion is that education is suffering as a result.

Even when I was in school over 5 years ago we were often taken down to the computers to learn such things as DRAMA and RELIGIOUS EDUCATION! Now someone tell me how that couldn't have been done in a classroom? And like I say, that was 5 years ago...

Anyway, contrary to my rant above, I do think these laptop schemes are good, as long as the schools in those countries don't go down the same path as the UK and use IT equipment just for the sake of it.


RE: Economics 101
By xphile on 5/21/2007 11:56:50 PM , Rating: 5
So what you're saying is..

Give a child a low-cost laptop, they will have fun for a day.
Teach a child to build low-cost laptops, they will grow up to be Michael Dell?

Ok yes yes I do get it - just couldn't resist the funny :-)


RE: Economics 101
By StevoLincolnite on 5/21/07, Rating: -1
RE: Economics 101
By StevoLincolnite on 5/23/2007 2:51:48 AM , Rating: 2
Eh, They can't run folding at home?
(Thats what I gather from being demoted).
Anyhow, it allows them access to the worlds information, they can access new farming techniques, Learn new medical techniques, research on how to build better houses, irrigation, etc.
I don't know about you, but I use my computer for more than just games, When I was back in highschool, I researched on how to build a small generator to power a small light globe using running water. (You could put it in a stream, or from a running tap, and the energy produced gave enough boost to power the pump and light globe, so as not to waste water).


RE: Economics 101
By RjBass on 5/21/2007 11:05:46 PM , Rating: 3
Apparently you have not spent much time in a third world nation.

Most of these laptops will be delivered to children who don't even have books in school. Each laptop is being given to the child to keep. Have you ever seen an underprivileged child with one good sole possession? That child will take care of it for life, until the laptop is 10+ years old. He will pass it down to younger brothers and sisters etc......

The children of third world nations need this. If they don't have books, and other basic tools for a proper education then how can they even think about competing in a modern day market when they are older? These children not only get the vast wealth of knowledge from the Internet, but the basic skills to perform a better job.

What's more, these kids are expected to fix and service their own laptops (The Intel version does not have this option) so not only will they get a better education, but they will also learn the basics about computer repair.

So a underprivileged kid gets one of these new laptops, he downloads all the information he needs for his report due next week, and after school he takes it home, to his hut that doesn't have electricity or running water, and thanks to the hand crank he can continue to work on his report regardless if the Internet connection exist or not. That is another feature that the Intel laptop does not provide.

The $100 laptop can be dunked in water, dropped from 10+ feet etc...

The $100 laptop was built for a child, looks like it is for a child, is designed specifically for a child. Have you even seen the Intel laptop? It looks and acts just like a miniature regular laptop, and most def won't stand the test of time in the dust, dirt, mud, and basic surroundings of a third world nation.

Intel's only motive to this whole thing is purely $$. Again they are trying to do nothing but drive the little guy out of business and thus will be hurting everybody else in the process.

The $100 laptop for these kids is an excellent idea that will be worth more then it's weight in gold.

I have already seen the benefits of these laptops in use, and to even try to describe how these kids feel now with these things is impossible. It is amazing.


RE: Economics 101
By drank12quartsstrohsbeer on 5/22/2007 9:55:47 AM , Rating: 4
Oh what a wonderful vision.

Look, the reason most third world countries *are* third world countries is because of corrupt and/or incompetitent governments. Laptops are not going to fix that.

Do you think these laptops will actually make it to the kids who need them? Or will they be bartered away just like the food shipments for famine victims?

To me this is all about rich nerds trying to absolve their own guilt about being rich. A lot of style and very little substance.


RE: Economics 101
By Oregonian2 on 5/22/2007 5:31:39 PM , Rating: 2
That's a nice vision, but that $100 laptop has a price of $175.

If his effort has to hide behind ignorance of its downsides and that Intel is bad for exposing his vision's faults, then maybe his vision wasn't so good afterall and maybe was just an ego thing with him -- which would explain that which sounds like whining.


RE: Economics 101
By osalcido on 5/21/07, Rating: -1
RE: Economics 101
By spluurfg on 5/21/2007 8:26:40 PM , Rating: 5
quote:
Do you really think there's not enough 3rd world kids to go around?


Not necessarily children, but orders from governments, which I am assuming is probably a lot less than the number of children in third world countries.

quote:
People are going to pay $175 on the OLPC anyways. This price was set before Intel made a move. If Negroponte is truly a man of the people and is selling these things at $0 profit, what makes you think he'll be able to chop $75 bucks off anytime in the near-future? He must be some manufacturing guru to accomplish that feat....in which case competition with Intel should hardly pose a problem.


...I think that he'll be able to 'chop $75 bucks off' because the article predicted that the price would fall to $100. I am assuming this figure is based on model where the price falls due to lower manufacturing costs per unit with increased production, and not because they think he's a 'guru'. A reduction of that much due to increased production is not a stretch by any means for electronics.

Note that the article states that Intel may be selling these things at below cost. Why would you sell something at below cost? Perhaps to secure a foothold in the market, and drive out your competitor? I'm betting that Intel has a lot more cash lying around than Negroponte's non profit organization. Furthermore, Intel may be desperate to destroy any market share that AMD can find.

Obviously this is all conjecture -- most of it simply an explanation of what I think Negroponte is saying, for those who think that he's a moron because he doesn't know what Econs 101 is.


RE: Economics 101
By osalcido on 5/21/2007 10:58:00 PM , Rating: 2
quote:
Note that the article states that Intel may be selling these things at below cost. Why would you sell something at below cost? Perhaps to secure a foothold in the market, and drive out your competitor? I'm betting that Intel has a lot more cash lying around than Negroponte's non profit organization. Furthermore, Intel may be desperate to destroy any market share that AMD can find.
</quote

So Negroponte sells these things at a profit big enough to increase manufacturing capacity = good.

Intel sells them at a small loss = bad.

I think I see where you coming from now =)


RE: Economics 101
By spluurfg on 5/22/2007 4:53:13 AM , Rating: 2
Well, they aren't really selling them for a profit, as it's a non profit organization... I think that as long as they have enough orders they should be able to lower costs.


RE: Economics 101
By osalcido on 5/22/2007 2:05:53 PM , Rating: 2
Um well how will they pay for these future manufacturing capacities that you speak of.. you know the ones that will allow them to drop the price..


RE: Economics 101
By masher2 (blog) on 5/22/2007 5:00:33 PM , Rating: 3
> "Well, they aren't really selling them for a profit, as it's a non profit organization"

Nonprofit organizations can and do make profit on goods and services. They simply don't pass those profits on to shareholders. Rather, they use them to pay salaries and/or finance other ventures.


RE: Economics 101
By stromgald on 5/21/2007 8:15:01 PM , Rating: 2
True, this makes it more difficult for Negroponte to gain economies of scale, but to be honest, if he did his job right, he shouldn't have to worry much. In building the OLPC, he should have gotten bids from multiple chip and component vendors and chosen the best and most cost efficient ones. But, before that, he should've gotten a feel of how many PCs he was going to build. Between those two things, Negroponte should have a solid backing from both his customers (the governments of 3rd world nations) and his suppliers (chip manufacturer, mobo manufacturer, etc.).

My worry is that he didn't do such a good job (maybe because he didn't forsee any competition), and now the third world countries are looking at switching to Intel's solution. No matter what the history is, expecting Intel to just back off is out of the question. Intel is profit oriented and sees profit in this venture. Negroponte should explore with his suppliers, specifically AMD, to see how to make his laptop more competitive rather than whining about his plight to the public.


RE: Economics 101
By Justin Case on 5/22/2007 12:34:47 AM , Rating: 2
He did. Intel wasn't interested. In fact, Intel (and Craig Barrett in particular) has been saying this ultra-low-cost laptop idea is stupid for the past 4 years. And now he's on a campaign to convince everyone who had signed up for it that it doesn't work, that Intel will have something much better, and so on. Pretty mught the definition of FUD.

And that is why Negroponte is complaining - because Intel is trying to poison 3rd world governments against the OLPC, not because they are delivering a credible alternative.

This reminds me of how some African countries went along with some so-called "environmentalists", refused offers of GM food, and let thousands of their people starve to death.


RE: Economics 101
By Oregonian2 on 5/22/2007 5:34:30 PM , Rating: 3
So the real problem is that those governments are stupid?


RE: Economics 101
By Justin Case on 5/22/2007 11:21:06 PM , Rating: 2
Governments are vulnerable to marketing and FUD campagins, just like regular consumers. So in a broad sense, yes the problem is that people in general are stupid. In this specific case, the problem is that Intel is using its marketing machine to kill a charity program, because they're afraid it'll hurt their profits in the long run.

It's as if McDonald's started spreading lies about the food people donate to refugees, to get them to buy Big Macs instead.


RE: Economics 101
By Oregonian2 on 5/23/2007 2:13:42 PM , Rating: 2
So if Intel does have a competitor product that the same customers might buy instead, what's wrong with that?


RE: Economics 101
By Justin Case on 5/23/2007 5:06:26 PM , Rating: 2
So if McDonald's starts spending its advertising money trying to convince people that food donated by charities is bad for you, what's wrong with that?

If you can't figure it out by yourself, I don't think there's much point in trying to explain.


RE: Economics 101
By Haltech on 5/21/2007 9:30:11 PM , Rating: 1
I would like to ask everyone who thinks Intel is doing this for profit and please reply with statistics. I see this initative as a non profit for the people Internet expansive and I am sure Intel is thinking the same. When you have a market share of about 80 percent of a multi billion dollar industry there is really no point in selling high price laptops to underprivileged communities across the world.


RE: Economics 101
By smitty3268 on 5/21/2007 10:05:50 PM , Rating: 2
Take an econ 101 class. Intel isn't doing this out of the goodness of it's heart, it's doing it for profit.

quote:
When you have a market share of about 80 percent

It doesn't matter what your market share is, if you are a company you always try to increase the number of sales you have.

quote:
there is really no point in selling high price laptops to underprivileged communities across the world.

I assume you meant low price laptops. Of course there is. If you can't sell any high priced laptops but you can sell cheap ones and still make a profit, then the best course of action is to sell the cheap ones and make a profit.

Your argument is like saying Walmart is opening stores in China out of charity because they already have a huge market share in the US. You know what? Walmart is still looking to expand to new customers, and if they didn't the shareholders would have every right to be upset. The same thing goes for Intel.


RE: Economics 101
By Haltech on 5/22/2007 1:20:45 AM , Rating: 1
I wanted statistics on profit...

So I guess if OLPC is doing this out of their hearts then why dont they give it out free. I mean come on you cant put a price on an education.


RE: Economics 101
By Wonga on 5/22/2007 6:06:17 AM , Rating: 3
Yeah, and I guess all those hardware manufacturers will accept their favourite currency, pixie dust dollars :/


RE: Economics 101
By Oregonian2 on 5/22/2007 5:36:50 PM , Rating: 2
When Intel donates money to the local food bank, they are expecting a profit off of it?


RE: Economics 101
By JAB on 5/21/2007 10:02:53 PM , Rating: 2
Intel just want to avoid competition . Once OLPC goes away they wont care anymore. Why educate them just give them a shovel and have them picking cotton.

I dont think some of the people making comments here are realizing that these children are people not things. Even if they are not attached to the world power grid they deserve a chance to learn and to dream. Intel's product is only for those already connected. It defeats the whole point to try and stop children form an education is just plain evil.


RE: Economics 101
By smitty3268 on 5/21/2007 10:09:51 PM , Rating: 2
Intel may not really care about those children, but they certainly don't bear them ill will either. In fact, Intel is probably better off in the long run if they are educated and become well off enough that they can buy their own personal computers.


RE: Economics 101
By animedude on 5/21/2007 10:16:02 PM , Rating: 5
http://olpc.tv/2007/05/21/60-minutes/

All of you should watch this before criticizing Negroponte and his humanitarianism work. Those kids are going to school because of the laptop or else they will out playing or doing work.

Intel is subsidizing those $200 laptop to get business. Intel is just trying to put out competition (AMD market share), and at the same time, destroying Negroponte's dream. What happen if Intel oust OLPC? If history serves you, they will just up their price on those laptop or worst of yet just stop selling (Intel loses money per laptop sold).


RE: Economics 101
By smitty3268 on 5/21/2007 7:23:06 PM , Rating: 5
I think you kind of hit the point exactly - Negroponte sees this as more of a social cause while Intel sees it as a business opportunity.


RE: Economics 101
By TomZ on 5/21/2007 10:06:56 PM , Rating: 3
If Intel is successful in getting low-cost PC's to the same children that OLPC would have, then what's the difference of OLPC or Intel manufacture them, as long as the objective is met? Why should you, I, or anyone case if Negroponte is involved or not? Seems like this is just an ego thing for Negroponte.


RE: Economics 101
By smitty3268 on 5/21/2007 10:12:28 PM , Rating: 2
Oh, I agree. I do think he is a little more concerned about keeping the cost down while Intel will focus on making a profit, but with any luck the competition between them will result in prices going even lower than they would have before.


RE: Economics 101
By Justin Case on 5/22/2007 12:53:16 AM , Rating: 3
Intel is actively marketing against the OLPC, trying to convince 3rd world governments to cancel their OLPC orders and pre-order their (Intel's) more expensive laptop instead.

In other words, since these governments have a very limited amount of money, Intel is telling them that, instead of buying 500 thousand OLPCs, they should buy 300 thousand Intel Classmates. Because they run Windows. And what 3rd world child doesn't need to be locked into the Wintel monopoly...?

Result? Intel profits, less children get laptops, eventually the OLPC project fails, and then Intel either increases the price or "forgets" about the project. And by then no one will back the OLPC (it failed once, it must be a bad idea, right?).

And what a lot of people here seem to forget (or perhaps selectively ignore) is that Intel had a chance to get into the OLPC project right at the start. They refused. They've spent the last 4 years saying it was a stupid idea. Now they realised they screwed up, and have set their FUD machine all the way up to "shameless".

This is the way Intel and Microsoft (and every other monopolistic multinational corporation) kills competition before it becomes a threat. And unlike with OSS, hardware can never be 100% free, so Intel can even afford to go after non-profit organizations.

This definitely does it for me. I'd sooner buy a used Cyrix right now than anything made by Intel.


RE: Economics 101
By RMSe17 on 5/22/2007 1:57:11 AM , Rating: 2
Yep, totally agree..


RE: Economics 101
By TomZ on 5/22/07, Rating: 0
RE: Economics 101
By Justin Case on 5/22/2007 1:03:35 PM , Rating: 2
This is not a "market", this is a non-profit organization trying to get children out of poverty and give them an education. The last thing they need is the Intel marketing machine spreading FUD and trying to get 3rd world governments to buy less laptops for more money.

If Intel is interested in helping, all they have to do is supply the OLPC project with cheaper CPUs. They had a chance to do that (still do, in fact), and weren't interested. They're tryng to use marketing and FUD to make a profit at the expense of the people that the OLPC project is meant to help.


RE: Economics 101
By TomZ on 5/22/2007 3:07:37 PM , Rating: 2
Negroponte did not claim that Intel is spreading misinformation about OLPC. Therefore, your accusation of FUD is off-base.

The thing that I read into this article is that Negroponte's ego is bruised because he got caught up in real-world competition. And yes, this is a "market" - why do you claim otherwise? OLPC has no inherent ability to be the only supplier of low-cost computers to developing nations.

Since there is a lot of money involved, obviously there's going to be competition. That's reality.

Finally, don't you think that even in the case of OLPC, that people are profiting from that? The whole supplier chain is profiting from OLPC, and not to mention the salaries that are paid by the OLPC organization to its employees.


RE: Economics 101
By Justin Case on 5/22/2007 11:35:52 PM , Rating: 2
Did you even bother to read the BBC article? Here:

http://news.bbc.co.uk/2/hi/technology/6675833.stm

And you might want to do a bit of research to understand what the OLPC actually is. Hint: it's not "just" a laptop, and it's a very different concept from Intel's (more expensive) "Classmate" laptop.

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

Finally, you might want to look up the meaning of "non-profit organization". Here:

http://en.wikipedia.org/wiki/Non-profit_organizati...

Hint: people don't have to work for free or pull raw materials out of their ass to be considered an NPO.


RE: Economics 101
By kemche on 5/21/2007 7:28:49 PM , Rating: 2
I agree with you on this.

Isn't the OLPC's goal is to provide every child with a laptop. Why do they care where it comes from. As long as child has access to a laptop that should satisfy him. I think he should welcome Intel's move.

KG


RE: Economics 101
By kitchme on 5/21/2007 8:38:55 PM , Rating: 2
Unless Intel's main goal is to drive OLPC (with AMD's cpu) out of business. Once that's accomplished, Intel COULD perhaps choose to fade out from that market or have a total monopoly if the market is profitable enough. Now, that's not a healthy competition where the consumer would have a better and cheaper product.


RE: Economics 101
By borowki on 5/21/07, Rating: 0
RE: Economics 101
By smitty3268 on 5/21/2007 10:15:20 PM , Rating: 4
Yes, and it was all planned out on our secret moon base by the aliens who are really in charge of our government and behind the 9/11 plot...

Then again, maybe they just want to help poor children???

Nah, couldn't be that.


RE: Economics 101
By borowki on 5/22/2007 8:27:35 AM , Rating: 2
We ARE helping them in protecting their way of life. Without our guidance, these poor people will just imitate us and lose their own unique cultral identity. They'd buy a real PC and teach themselves how to use Excel. With a OLPC laptop, they can compose music with the TamTam software, and in doing so, becoming closer in touch with their spiritual selves and the rhythm of nature.


RE: Economics 101
By DallasTexas on 5/21/2007 7:29:06 PM , Rating: 2
Excellent point. At the end of the day, this is a market and not just a charity exercise whether Negroponte likes it or not. Competition is not excluded.


RE: Economics 101
By Roy2001 on 5/21/2007 7:40:25 PM , Rating: 2
Yes, it is business and Intel may want to drive him out. So What? Intel should have a pitty and "sell" him chip for a few dollars?


RE: Economics 101
By Byte on 5/22/2007 12:35:13 AM , Rating: 3
Great now most of Africa can scam us instead of just Nigeria.


RE: Economics 101
By Justin Case on 5/22/2007 12:37:31 AM , Rating: 4
This has nothing to do with competition. Intel's proposed alternative is actually more expensive ($200). That is not the issue.

The issue is that Intel (Craig Barrett in particular) has been saying this ultra-low-cost laptop idea is stupid for the past 4 years. And now they're on a campaign to convince everyone who had signed up for it that it doesn't work, that Intel will have something much better, and so on. Pretty mucht the definition of FUD.

And that is why Negroponte is complaining - because Intel is trying to poison 3rd world governments against the OLPC, not because they are delivering a cheaper alternative.

This reminds me of how some African countries went along with some so-called "environmentalists", refused offers of GM food, and let thousands of their people starve to death. FUD, pure and simple.


"Nowadays, security guys break the Mac every single day. Every single day, they come out with a total exploit, your machine can be taken over totally. I dare anybody to do that once a month on the Windows machine." -- Bill Gates

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