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OLPC
OLPC's XO Faces Many Challenges

By Frederick Lane
November 27, 2007 9:18AM

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From the start, the OLPC has faced daunting challenges in persuading government officials to invest in the Linux-based XO laptops. Many of OLPC's challenges have stemmed from a classic Catch-22 problem: OLPC had billed the XO as a $100 laptop, but the low number of orders so far has prevented OLPC from realizing economies of scale.
 



"Give One. Get One." That's the slogan for the two-for-one program by One Laptop Per Child, an organization set up to promote and distribute the innovative, low-cost, Linux-based XO laptop computer developed by former MIT professor Nicholas Negroponte and other members of the school's Media Lab.

In early November, OLPC announced a two-week program to allow members of the general public to purchase two XO laptops for $399; one laptop is shipped to the purchaser, and the second is donated to a child in a developing nation. In addition to getting an XO laptop, the purchaser also receives a $200 tax credit for the donation of the second laptop and, thanks to T-Mobile, a year of free Wi-Fi access.

Due to interest in the program, OLPC announced that it is extending the offer through December 31, 2007. After that date, consumers will be able to obtain a laptop for themselves or their children only by donating 100 or more XO laptops.

Political, Manufacturing Challenges

Despite the laudable effort, the OLPC initiative has run into some challenging economic and political roadblocks that might hobble Negroponte's bold vision of millions of meshed computers in developing nations.

From the start, the OLPC program has faced daunting challenges in persuading government officials to invest in the laptops. Many of those challenges have stemmed from a classic Catch-22 manufacturing problem: Negroponte originally billed the XO as a $100 laptop, but the low number of orders so far has prevented the program from realizing economies of scale. Mass production of the device (spurred in part by the "Give One, Get One" offer) began just three weeks ago.

The XO's cost is still remarkably low -- just $188 -- but still high enough to cool the interest of possible large-volume purchasers such as Nigeria and Libya, both of which were considering purchasing a million or more laptops each. OLPC did recently announce, however, that it has finalized an order from Uruguay for 100,000 laptops, and that similar orders from several other countries are in the works.

When the Chips Are Down...

The OLPC's most serious threat is in the marketplace. Stung by Negroponte's selection of AMD chips to power the XO, rival chipmaker Intel recently rolled out its own low-cost, durable laptop called the Classmate. The company has been aggressively marketing the Classmate in many of the same poor, developing countries that Negroponte and OLPC had targeted for the XO.

The option to purchase a laptop capable of running Microsoft Windows for just $100 or so more than the XO (which runs a suite of Linux programs, but not Windows) has caused many countries to delay or even reconsider purchases of the XO. Moreover, Microsoft just announced that it will sell developing countries a special package of software (with Windows, a student version of MS Office, and various educational programs) for just $3 per user.
 

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