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
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.
quote: Intel's entry dilutes the market and makes this more difficult.
quote: 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.
quote: 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.
quote: Do you really think there's not enough 3rd world kids to go around?
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.
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.</quoteSo 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 =)