January 4th, 2008

The Intel/OLPC break-up - I'm surprised the marriage lasted as long as it did

Posted by Adrian Kingsley-Hughes @ 5:58 am

Categories: Industry, Intel

Tags: Intel Corp., One Laptop Per Child Project, Adrian Kingsley-Hughes

So, Intel and the OLPC consortium have parted ways. I’m surprised that things stayed sweet for as long as they did.

According to Intel, the problems stemmed from the OLPCs insistence that Intel end support for projects that crossed paths with the OLPC’s XO laptop - in other words, the Classmate PC. Intel wouldn’t withdraw support so OLPC chairman Nicholas Negroponte asked Intel to pull out from the group.

So why was the bust up inevitable? Well, first off, the OLPCs decision to use AMD processors was never going to sit well with Intel. Another problem was the fact that the OLPC didn’t like Intel selling the Classmate PC for less than it cost to make, a move which Negroponte claims was designed to undermine the OLPCs XO system.

But that’s all in the past. What matters now is where both projects go. The way I see it is that I can’t see Intel allowing the OLPC to give them such a public bloody nose and get away with it. While I don’t expect Intel to have an all-out war with OLPC, I do expect the chip giant to up the pressure on the OLPC. The easiest way to do that is on price. The XO that was supposed to sell for $100 is currently selling for closer to $200 which represents a real problem, and this makes the project vulnerable. If Intel can keep the price pressure up, the XO is in trouble. The millions of orders that the OLPC were expecting haven’t materialized and if the price remains elevated, they may never appear.

It’s hard to know whether this will mean fewer laptops getting into the hands of children in developing countries, or just fewer XO laptops.

Thoughts?