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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."
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.
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).
...But I digress. TREMBLE PUNY HUMANS!ONE DAY MY SPECIES WILL DESTROY YOU ALL!
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.
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.
"We can categorically state we have not released man-eating badgers into the area." - UK military spokesman, July 2007
Competition is always welcomed, or so says everyone here
Do _you_ still say so, after this scenario?
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.
Recursive: Adj. See Recursive.
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.
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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.
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?
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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.