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

Ah, the canonical monopoly response...

[FooAtWFU]

Ah, yes, the canonical monopoly tactic to competition coming along.

• sit there minding your own business making $$$$$
• competitor comes along with something
• monopoly makes its own stuff to CRUSH the competitor (optionally even suffering a short-term loss)
• things drift back to making $$$$$
• market failure!

Re:Competition is good

[kat_skan]

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?

Maybe a long time if Walmart decides that selling $200 laptops along side their $200 desktops sounds like a good idea. Granted that won't help children in developing nations much, but it'd sure do something interesting to the PC market.

the nature of the competitive threat

[Gary W. Longsine]

I'm not sure about Intel's role in this, but Microsoft undoubtedly sees a threat beyond what's being discussed here. The threat isn't directly Negroponte and the One Laptop Per Child project, it's Linux. If you put a cheap laptop in the hands of a few hundred million kids, they won't grow up to be afraid of it. That's the real threat. Microsoft's threat horizon exceeds a generation.

Re:Competition is good

[burnin1965]

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

Good question, and the answer is that Negroponte's goal is NOT to get cheap laptops in the hands of poor children.

http://laptop.org/vision/index.shtml

          "It's an education project, not a laptop project."

        -- Nicholas Negroponte

No matter how many times it is explained over and over again it seems Intel and Microsoft have successfully twisted this story of constructive education into some cheap assed laptops for the poor expanding market dilema where there is a need for competition. If Negroponte is pissed he has good reason to be and anyone at Intel or Microsoft who has been involved in the stupid classmate PC project and the efforts to kill OLPC should be ashamed of their scum bag used car salesman tactics.

Negroponte and his team put in the effort to research and develop their constructive education idea and now that they have implemented all their learnings and research into a ready to deploy solution you have these greedy bastards trying to destroy the project in the name of market share and profits. And make no mistake about it, neither Intel nor Microsoft actually have any interest in the goals of the OLPC project or the poor countries it is intended for, their involvement is self serving and designed to generate PR so they can maintain mind share in their current markets, not in some imagined expanding market in poor countries where they see potential for profit.

I may come across as rather harsh on the classmate PC and Microsoft and Intel's actions but again I think its deserved considering the years of work the OLPC people put into a non-profit project with admirable goals only to see it threatened in the name of greed.

Re:Competition is good

[jc42]

What is being offered by Microsoft and Intel is an inferior, but more expensive product.

And your problem is? If it's more expensive and inferior then it'll be unsuccessful.

Not true at all. The poster child for the situation is Netscape, but Microsoft has "done a Netscape" on lots of other startups.

Fact is, a high-quality product by a small, underfunded company can be and often is squashed by a poor-quality product with a large advertising budget. That has been Microsoft's approach from the very start, when they had the huge IBM budget behind the first model "IBM PC". The tech world smugly predicted that such a shoddy, overpriced computer couldn't possibly succeed against the many better things that were already for sale. But it did succeed, and most of those CP/M companies are long gone, because people recognized the IBM brand, and IBM could spend more on the ad campaign than the entire operating budgets of all its competitors combined.

That's exactly what MS will try here, and chances are very good that they'll end up bankrupting the OLPC project before it gets off the ground. MS has already shown that it's willing to use bribery and back-room politics to derail OLPC orders. They've probably learned to not be quite so blatant, and cover their tracks a bit better, and they may well succeed with such tactics in many cases.

This campaign could well be yet another textbook case in how monopoly capitalism works. Stay tuned; it'll probably be well covered here, though not in the mainstream media.