Intel, Microsoft Despised the XO Laptop

gregsim writes "The Wall Street Journal today reports that the new XO laptop, centerpiece of the One Laptop Per Child project, is stimulating an active response from both Intel and Microsoft. The companies evidently feel threatened by the little upstart, intended to help third-world children. (The XO runs Linux and uses AMD chips.) Microsoft has cut their software to $3 each and Intel has designed their own laptop called the Classmate to sell between $230 and $300, nearly double the XO's price. Rather than defend the relative merits of his creation, professor Negroponte is crying foul and (if the article is to be believed) not even arguing the technical merits. The initial demand for the XO has fallen well below Mr. Negroponte's projections as Intel and Microsoft have successfully argued that their entries are superior. 45,000 have been ordered through the Give One, Get One campaign. I am happy that I ordered mine — it will be a landmark model in any case."

Comments

Competition is good

[I'm Don Giovanni]

If Negreponte's goal is to get cheap laptops in the hands of poor children, why would he be angry? Those poor kids deserve choice, and competition from the Classmate provides that. So fewer kids get the XO, so what? Seems like Negreponte is letting his ego cloud his vision.

Re:Competition is good

[macz]

Competition is good, but anti-competition is bad. Negroponte's argument is that the big boys are smothering XO in the crib with half-assed attempts at being cheap (but DRM and IP laden).

Re:Competition is good

[0123456]

"If Negreponte's goal is to get cheap laptops in the hands of poor children, why would he be angry?"

If Microsoft and Intel put Negreponte out of 'business' by selling subsidised low-cost PCs, how long do you think they'll continue to sell them afterwards?

They're not doing this out of the kindness of their hearts, they're doing it because they see a competitor they want to eliminate.

Re:Competition is good

[ktappe]

he really ought to leave this stuff to the pros and let the market bring prices down.

We HAVE left it to the "pros" for decades and what did they provide this marketplace? Absolutely NOTHING. They completely ignored developing nations in favor of the high margins of the first world. Only now that someone has finally paid attention to the billions of computerless do Intel and Microsoft get off their butts and half-heartedly and belatedly bring a half-assed and overpriced solution to the market. Nice.

I'm not sure who I'm madder at: Intel & Microsoft for their transparent claims of "trying to help", the potential recipients of the XO who are being fooled into not ordering it, or folks like you who are not seeing any problem with this whole cock-up.

Re:Competition is good

[NMerriam]

There's a big difference between actual competition (which is great) and competition that exists only long enough to bankrupt a competitor so that your primary market is extended (if only for a few more months).

If MS and Intel want to seriously get -- and STAY -- in the game of providing system for the developing world, that's great. The concern is that they'll produce just enough press releases for the XO to stop getting orders it needs to stay viable, then once the XO is basically dead, MS/Intel say "oh, well now that we look at the market, we really think tour new $500 design is more appropriate". Then it would take another year or three for the XO or something similar to get back into production. Anyone with more than a few months of experience in the computer industry is familiar with this pattern.

As a side note, I was shocked when my sister, who is about as technical as "my computer's cupholder is broken!" actually mentioned the "buy one get one" promotion over Thanksgiving. They've done a great job marketing, even if my sister didn't have any idea what the program was about or what made the computer unusual, she just knew about it as the $150 laptop.

Re:Competition is good

[Anonymous Coward]

What is being offered by Microsoft and Intel is an inferior, but more expensive product. They are trying to leverage their (arguable) monopolies to not only set a higher price than the market wants, but to make sure legions of children don't grow up learning non-Intel, non-Microsoft products.

It is hard to blame Microsoft entirely, since they can't exactly compete with free. Intel, on the other hand, has no excuse. If they were truly acting competitively, they would try to sell Negroponte on their processors and compete with AMD (you know, their actual competitor) that way, and not screw over those kids in the process.

Re:Competition is good

[Fourier404]

Actually, they have done something. If you haven't noticed, computers have gone from being $10K to $300 or less for a budget machine. Laptops are also getting ever cheaper and were going to be hitting the $300 price point themselves because middle-class kids all want laptops and not all parents are all that rich. There are two kinds of poor countries we're talking about here: There's China and India, who don't need our help, their economies are exploding and are going to take care of themselves, and then there's the African countries wracked with violence who wouldn't have money to spare on laptops for all their children no matter how cheap they were.

Re:Competition is good

[Bert64]

Depends who does the buying...
If the people buying these machines aren't spending their own money, and intel or microsoft offer them some money into their own back pocket in exchange for spending more of someone else's money, what do you think they'll do?

Re:Competition is good

[hhas]

Competition is great. Microsoft selling their products as $3 a pop isn't competition though, unless you think $3 is cost price or greater. That's a subsidised loss leader intended to undercut the competition and thereby put them out of business, a classic anti-competitive tactic. You're welcome to disagree, of course, but try fitting out a US-based organisation with $3 copies of MS software and see how long it takes the BSA to drop on them like a ton of bricks.

Re:Competition is good

[cyphercell]

The problem is companies like Microsoft and Intel go unpunished when they effect a coup de grace, against a gentleman like Negreponte, who is actually trying to do SOMETHING. Fact is no one knows what the real solution is, but you can't defend Microsoft's right to participate in foreign corruption just because the place is a shit-hole.

Re:Competition is good

[thrillseeker]

If it's more expensive and inferior then it'll be unsuccessful.

Only if the market is actually free (of biased legislation, etc.)

Re:Competition is good

[cecil_turtle]

There are a number of things wrong with that statement. It's an extremest point of view that "we shouldn't worry about X until Y and Z are fixed". Similar statements are "we shouldn't try to cure aids until after we cure cancer". Yes, parts/most of Africa has a number of problems larger than "kids don't have laptops". But if you know anything about this project, it's not about giving kids laptops so they can bang around on MySpace all day like american kids do. I suggest you get educated about the project, goals, the technology implementations, etc. Download an emulated version. Try out the server version that teachers/schools will run. Understand the potential impact on education in Africa, which may accelerate forward progress of upcoming generations in Africa.

Re:Competition is good

[Anonymous Coward]

no, for a kid in a mud hut, NOT LIVING IN A MUD HUT is very important. not computers.

Why? Mud huts are cheap to build, easy to maintain, and do an admirable job of keeping the wind and rain off you.

You are making the typical rich-white-kid mistake of looking at people in a developing country, picking out the aspect of their life that you would like the least, and assuming that that's their biggest problem. In reality, however, mud huts are irrelevant. They're low on prestige, but in a practical sense they're a pretty good form of housing in that environment. Whereas education is critical, and these computers address that problem directly.

Re:Competition is good

[Entropius]

I would include dishonest advertising as another factor making a market non-free.

Re:Competition is good

[ozmanjusri]

But that leaves them out of the ~90% of computers that run windows and puts them at a substantial disadvantage in that regards.

That's an important point, and it's why we're seeing so much effort from Microsoft.

The more Linux machines that get out to real users, through the OLPC, Asus EEEPC, Nokia N810 and other similar machines, the clearer it will become how much of a lie that disadvantage claim is.

A successful OLPC project would show the world definitively that an expensive, proprietary, antifeature-laden OS is an unnecessary waste of money and resources.

Would a starving ethernopian...

Ethernopian?
Christ, at least with enough OLPC using kids out there we might get some decent discussions on Slashdot, not more of this ignorant, bigoted astroturf.

Technical merits?

[CRCulver]

It seems to me that the children to whom these laptops are going don't need whizbang computing power, they just need basic computing ability. The OLPC project has no need to "argue the technical merits" of their device against potentially more powerful (but more expensive) competition when the price for this technology is the lowest around.

Waste of time

[Anonymous Coward]

The third world needs a lot more than a cheap laptop. They have to figure out agriculture first!!!

Re:Waste of time

[Colin Smith]

They have to figure out agriculture first!!! They can't figure out agriculture till the USA and EU stop dumping their subsidised agricultural overproduction on their markets and open their own agricultural markets to competition.

Re:Waste of time

[Artemis3]

And make it illegal for USA and others to sell their patented transgenic sterile seeds that happens to kill local species...

Fighting a non profit

[coolate]

The real annoying thing is that they are not jumping in the market to help kids but undermine a non profit so they can get the market. Other companies like AMD have been helping the effort, but Microsoft and Intel see it as competition. This is a non profit effort. Next the pharmaceuticals will be going after the red cross because they want to sell cheap blood alternatives to disaster victims. Yeah competition! I am proud to have gotten one.

Negroponte is surprised about the actual demand?

[Flavio]

If so, I'm sorry to say he lacks the cynicism to deal with politicians, specially those from third world nations. These individuals will endorse any project that makes them look good. An OLPC endorsement is marketing gold from a politician's point of view, because it ties education, children and technology -- areas which third world nations are very reluctant to invest in -- all at zero cost.

Talk is cheap.

Re:Ah, the canonical monopoly response...

[tftp]

1. OLPC makes a $100 notebook, offers for sale at cost.
2. Wintel makes a $50 notebook, offers for sale at great loss.
3. Customers leave OLPC and stampede to Wintel.
4. OLPC closes up the shop.
5. Wintel cancels the project. Customers stand there empty-handed.
6. Wintel wins - by doing nothing other than a few press-releases.

Competition is always welcomed, or so says everyone here

Do _you_ still say so, after this scenario?

Re:That's great

[stretch0611]

Competition is good...

However, Monopolies are bad. This is a clear case of a monopoly using its power to stifle long term competition at a short term profit loss.

Do you honestly think Microsoft would offer both an OS and Office for $3 if it wasn't trying to stifle competition? As soon as the OLPC project is broke and a memory, expect the price of Microsoft's software to increase exponentially.

Re:Found the Problem

[tom's a-cold]

No real vendor support. Who is going to buy these things when they have to fix every single problem themselves?

Haven't travelled much, have you? What, you think Fedex does pickups in rural Chad at a rate the locals can afford? Believe me, it's difficult calling support when there's no phone. In much of the world, it's mend and make do. If someone local doesn't do the work for you, it isn't going to get done.

So perhaps you have some ideas about how vendor support will be provided by the likes of Microsoft?

Let me see who defends capitalism

[bogaboga]

It is in situations like these that capitalism disappoints me. Those who tout capitalism will say that "it's a free world"..."survival for the fittest" and so on.

But in this case, companies are entering a [new] market in order to kill competition. No wonder, even in the so called developed capitalist markets of the industrialized world like Canada, no foreigner can own a majority stake in the telecommunications sector for example.

Re:3rd world needs to figure out birth control fir

[LooTze]

Studies in India have shown that the best way to reduce population growth in a democracy is to educate women. Percolation of computers and cell phones into the rural areas have allowed significant (class room/world exposure type of) education to happen even outside the schools. This has been a more recent phenomenon and while these have had definite economic advantages (e.g. google - kerala fishermen cell phones). It is not clear as yet whether this type of education will also help in the same way but it definitely seems plausible. In the absence of coercion there appears to be no other reliable way to reduce the growth rate. Needless to say, the benefits of education and access to computers has obvious advantages in things like agriculture, etc.

Intel's Sucker Punch. Tech Merits are Obvious.

[Erris]

Behold "peace" with Intel and M$:

In May, Mr. Negroponte appeared on CBS's "60 Minutes" and blasted Intel, suggesting it was trying to drive his nonprofit out of business. ... Two months later, Intel announced it was joining One Laptop's board. The agreement included a "nondisparagement" clause, under which Intel and One Laptop promised not to criticize each other, according to Mr. Negroponte.

but

He seems most frustrated with Intel, whose overseas sales force has trumpeted the Classmate over his laptop in Nigeria and Mongolia, using marketing materials that claim the Intel machine is superior. "These are not isolated examples," he said in a recent interview. "They are daily events."

Par for the Wintel course, self restraint is foolish because M$ and Intel will always pull every trick they can. When convicted monopolists urge you to hold back, listening to them is the worst thing you can do. Intel traded a few million dollars for what's going to millions of units in sales. That's too bad, because Windoze is the wrong OS for the job.

It's easy to see that the usual one size fits all Windoze is not useful to school children, especially those in the developing world. It's designed for US fortune 500 businesses and to satisfy the wants of the MAFIAA. It's dependent on a $400 "office" suite for the most basic of paper writing in English and it has little else. Native editing and authoring tools are pathetic, networking is designed for an office LAN and media tools are designed to extract money from rich US college students rather than to encourage creativity. Foreign language support in Windoze is pathetic, as you would expect from software that can't take corrections in the field. All of this can be said about M$'s latest and greatest OS. I'm scared of what they have to offer for $3. Any developing nation that wants to see what will happen to the Intel machine has only to look at what happens to the millions of used laptops the developed world disposes of daily in their backyard. Laptops being tossed out by the developed world are more powerful and have better software but could be used right now by developing nations for next to nothing. They are not used because they are not well suited to the task and Wintel laptops that make it to the developing world today are sent there as toxic waste. OLPC addressed all of these concerns in their design.

Re:Negroponte's Dumb Idea

[99BottlesOfBeerInMyF]

That particular idea is fundamentally flawed. If there is one thing that we have learned from the technology-based industry in the western world, it's that the vast majority of people have absolutely no ability to work in it. It's not like farming - if you can hold a stick, you can be a farmer.

I said work in intellectual property including custom software. Today, a few thousand people with these laptops could probably make more than they do now, by solving captchas. Pretty much anyone can learn to be literate and to read/write several languages with a few years of training, so they can be paid for translation work and editing. Then there is original content production, data entry, etc.

To write custom software worth paying for takes ten years of near-full-time experience and practice, a flexible mind, and the ability to think. People in the third world are not going to be any better at doing these things than we are, and we suck at it.

Right, so they're no better at it than we are, but have a thousand times the unemployment rate in some localities and will work for one one hundredth the cost.

You do not turn farmers into knowledge-based workers by giving them a laptop.

First, they aren't farmers now, they're children without much in the way of skills because farming does not pay enough to pay taxes on the land when the US is giving the same food away for free. You turn them into knowledge based workers by giving them a laptop and network access and a wealth of educational data and software specifically designed to be easy to modify for their entire childhood. It is called an education, and growing up with a basic laptop, wikipedia, and internet access will allow them to develop computing skills as they grow. Did you have access to a computer when you were young? Do you know many people who program who did not?

There are no short cuts in establishing a modern-style economy across half a planet - it takes centuries of work, in education, industry, construction, and technological development.

Does the phrase "modern-style economy" actually mean anything? An economy is an economy and providing tools that educate and are usable, certainly can make a real difference.

If this endeavour is going to have any benefits at all (and that's pretty questionable - whether it's worthwhile is open to debate, but it is definitely not certain that it will be), this is not going to be one of them.

Okay your skepticism is noted. That said, this is the best effort I've ever seen to provide a sustainable income for people growing up in some of these countries. If you think giving up is a better idea, then there is not a lot of point talking to you, otherwise; let's hear your better and more effective idea.

Re:the nature of the competitive threat

[swillden]

in the USA many jobs require some basic knowledge of Windows and Office.

In the USA many jobs require some basic knowledge of computer concepts, like files and folders, user accounts and passwords, use of a mouse, etc. They also require knowledge of word processor use, spreadsheets, e-mail, web browsing, etc. For those uses, Windows, Linux and OS X are interchangeable.

The XO operating system is a little further out there, because the UI is quite different from Windows or mainstream Linux distributions, but even there the differences aren't going so large that significant retraining is required. Especially since the XO is specifically designed to encourage exploration and make its users comfortable with the computer, rather than afraid of it. A user who is willing to explore a little and understands basic concepts can easily figure out how to get the job done, without a lot of remedial training.

Even more important than all of that is the simple fact that we're talking about kids who aren't going to be in the workforce for years, and during that time the systems are going to change -- probably more radically than they have in the last 10 years. The key is to understand what computers are and how they work, and for that purpose the XO is a significantly better system than any variety of Windows. I think kids who grow up using an XO laptop will probably be more capable of using a Windows 8 system than kids who grow up on Windows.

Finally, odds are that in the parts of the world where lots of XO laptops are used, when the kids enter the workforce they won't be using Windows anyway. That, of course, is what terrifies Microsoft.

Not a Monopoly

[DrYak]

so the negroponte's camp had the "monopoly" (a oh, so loved word here) or the solo position in this project

The major point is that their project was free/libre opensource based. It could have been emulated by any one else. And whole point of Negroponte is that one day, as those kids grow up, they would be able to easily start their own computer technology project, based on knowledge they acquired learning on tools like the OLPC and using technology and ressources available freely for them to base they project on, thanks to F/L-OSS.
It's not a monopoly to Negroponte because their technology isn't locked into their own hands at all.

Your analogies are bad.
It's not Pespi or Coke, it's OpenCola and Vores Øl (recipes freely available on wikipedia for every one to use) against both of those corporation.
It's not BigMac or Super...whateverstuffyoumentionned, it's home grilled buger on your own backyard grill (without any intellectual property lawsuits involved) against the fast-food corps.

The main purpose behind this is bring those kids a tool that they can subsequently own themselves and do whatever they want to do. This is possible with free/libre software, because that's the whole point for which the GPL license and the FreeSoftware Foundation where created.
This wouldn't be possible with microsoft in the play, because whatever happens with the Classmate, the software running on it will continue to be the private property of Microsoft. Everything one could dream to do with it will have to be done only after obtaining license. Even if it may cost only 3$ currently, it remains in the hand of a foreign US company.

XO Laptop is about empowering the current learning kids, and giving them something that they can control.
Classmate and $3 Microsoft softwares is about creating a steady stream of future consumer which have been raised into sheepishly thinking that information technology is only something that come from a foreign US company, and who could one day buy Microsoft's future software at whatever price they decide then.

Re:Ah, the canonical monopoly response...

[Antique Geekmeister]

Until 3 years later, when they need a new laptop for a new child or for a project or their old laptop needs upgrade or replacement. And until you need new software, which is locked to that proprietary OS and costs 5 times as much as it should.