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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 $300, nearly double the XO's price. Rather than defend the relative merits of his creation, professor Negroponte is crying foul and (if the article is to be believed) not even arguing the technical merits. The initial demand for the XO has fallen well below Mr. Negroponte's projections as Intel and Microsoft have successfully argued that their entries are superior. 45,000 have been ordered through the Give One, Get One campaign. I am happy that I ordered mine — it will be a landmark model in any case."
It seems to me that the children to whom these laptops are going don't need whizbang computing power, they just need basic computing ability. The OLPC project has no need to "argue the technical merits" of their device against potentially more powerful (but more expensive) competition when the price for this technology is the lowest around.
Competition is good, but anti-competition is bad. Negroponte's argument is that the big boys are smothering XO in the crib with half-assed attempts at being cheap (but DRM and IP laden).
...But I digress. TREMBLE PUNY HUMANS!ONE DAY MY SPECIES WILL DESTROY YOU ALL!
Ummmm, the kids don't really have a choice about which one they get. They are ordered by the kids' respective governments. The other problem with the Wintel offering is that it's not environmentally hardened like the XO. For a kid in a mud hut having a computer that can take intense amounts of punishment is very important. Another thing I don't like about Wintel interfering is that it really isn't geared towards learning, they're worried about a bunch of kids learning something other than M$ software and intel Hardware. The XO is pretty much agnostic when it comes to software and hardware, they're going for cheap durable and good for learning which they have with the current setup. Now if Wintel were worried about the kids not getting something important to education and took steps to mitigate that lack then I don't see anything wrong with them getting involved, but really all they're worried about are future profit margins.
"Some books contain the machinery required to create and sustain universes."-Tycho
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 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.
The cheapest I can find a hand powered generator capable of powering a laptop, even used, is about $60. The cheapest I can find used laptops online is about $200. How much value there in the tailored OS, preloaded with software and reference material and preconfigured to be ideal in the conditions of the third world?
I think you're very mistaken. Getting a good laptop that will work well for children in these situations, with questionable access to electricity is a lot harder than you seem to imply. And even if you do, it probably will still fail to meet the second half of the criteria, which is to say it is all free and easily editable/customizable without any lock-in to a particular vendor. The first world has undercut the agricultural sector in much of the third world and catching them up with agricultural equipment and fertilizer production would cost a huge amount. Providing them with the foundation to enter into the intellectual property industry, including custom software. This is a chance for them to develop a sustainable industry and income and offer their services to the world.
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.
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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.
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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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I agree that's a bit more than Vista is really worth, but maybe they'll give up another 20-40% on volume orders.
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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.
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.
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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.
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.
Those who do study history are doomed to stand helplessly by while everyone else repeats it.
There are other big issues. The OLPC boots in seconds, and is extremely efficient in terms of power, and massively avoids all the gewgaws Microsoft mandates as "features" for its software. This is deadly to new markets for them, so Microsoft and Intel are engaging in a normally illegal practice called "dumping". This is using the money from your more profitable markets to sell your goods, below cost, to drive a competitor without such deep pockets out of the business.
The practice is most easily done by a monopoly to prevent competitors from entering the market. We see it extensively in the diamond market, we see it by Microsoft in China to block Linux releases, and we've seen it in new markets by Intel. So there's no surprise here.
I checked this thread just to see who made the "dumping" argument.
According to the article I read, Microsoft has been dumping Windows+Office at $3 into these markets to stunt the OPLC market share. That's dumping by any definition.
The worst was reading some guy from Libya saying they opted for Intel/MS vs OPLC because they didn't want to be a dumping ground for OPLC. Wait 10 years, let MS get their hooks in, then as soon as the competition is gone, no more $3 windows. This is how the developed world always rooks the undeveloped world. The 419ers are just a tiny bit of poetic justice by comparison - it turns out the nuclear weapon Microsoft holds is the same psychology that fuels Ponzi schemes. Just afraid to be left out of the "success" everyone else APPEARS to be having.
Sad, really, that this one official will sell his whole country out to loan sharks because he's scared of not looking like a cool kid ("no one ever got fired for buying IBM!"). Well, that and probably some well-placed bribes.
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