What the OLPC project is screwing up and how to not be the next Newton:
Nicholas Negroponte is the chairman of the OLPC project, sponsored by MITʼs media lab; its stated goal is to bring laptops to the developing world in order to bring to the third world the sort of access to information that the first world has long enjoyed. They are doing a lot right - I will leave that to you, it is easy enough to find - but they are also doing a lot wrong.
“We will not launch this without five to ten million units in the first run. And the idea is to launch with enough scale that the scale itself helps bring the price down and that is why I said seven to ten million there, and we are doing it without a sales and marketing team -you are looking at the sales and marketing team - we will do it by going to seven large countries and getting them to agree and launch it and then the others can follow.”
Here is my problem with this noble goal - the countries responsible for the OLPCʼs market are notoriously flaky. Venezuela pulled out of talks with OLPC, and bought a million Intel Classmate PCs. Intel pulled out in order to do the same thing with Windows XP; they are even selling their Classmates for below cost. Brazil, while impressed with the project, has decided it is necessary to upgrade their network infrastructure to make the XO program worth implementing. With troubles like this, it brings into question the single most important assumption the OLPC people made: Economy of scale. This means that ordering the small batches that proved to be what the market wanted drove the price of the $100 laptop up to $200. At $100, they were untouchable; at $200, other netbook vendors are eyeing the third-world market hungrily.
History Repeats: Shoulda Listened to Apple:
The year was 1997, and I was riveted - and in middle school at the time. But laptops were not for middle school , nor would they be until ... oh god, is it a decade now? But it was a near miss that year as Apple introduced the eMate 300. As with the OLPC, they were small, extremely rugged, low-power machines intended for education. And they were both green. The eMate featured a small touchscreen, a battery that I charged on a bi-weekly basis (24 hours runtime per charge stock, with an aftermarket battery), serial, IrDA, and a PCMCIA slot for expansion. Contrast this to the XOʼs 20+ hour battery, USB, 802.11B/G/S, and SD card slot - both had less than cutting edge graphics, unparalleled battery life, a standard serial port, wireless data, and an expansion card that was all quite up to date. And they were both green.
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It was a wonderful idea then to put computers in the hands of children, and it still is - and both projects used the same route to distribution. They both approached school districts and educational institutions in order to get the units, and their supporting infrastructure, bought in bulk. Both, when they reached mainstream customers, suffered from poor distribution, and inflated prices. Also, both have failed (so far - here is hoping!). Of the similarities I have mentioned, which do you think is most likely to cause problems? I am going to assume you said problems with distribution and pricing, since I made it pretty obvious. The eMate was an awesome machine - it single handedly turned Appleʼs Newton division profitable, and its few users gave it rave reviews in the scarce months before Steve Jobs returned to apple and torpedoed it. Even today, it is a What the OLPC project is screwing up and how to not be the next Newton: uniquely capable machine, still favored for field data-collection by some pollsters and among the hackers who continue to write software and adapt new hardware to the venerable machines. The problem was not with the device itself, which very nearly sold itself despite Appleʼs lackluster marketing. Indeed, the biggest complaint of eMate users was that it was too hard to get. The XO has a problem in that it is too expensive because it does not have enough buyers. The XO has rabid fans that want the machine, but are unwilling or unable to buy two and donate one to charity, or missed out on the occasional Give-1-Get-1 promotion that has been the only opportunity to buy these machines new in the developed world.
Anyone else notice that these problems solve each other? I propose that continuing to sell XO laptops year-round through Amazon with a much smaller donation tacked on should increase the customer base significantly. Further, selling XO laptops at major brick-and-mortar chains with an SD card loaded with open-source textbooks and educational material would go even further toward increasing demand; this is a case where “Think of the children!” is entirely appropriate and not being used to erode civil liberties. Lots of parents buy their children educational aids, from flash cards to WordMuncher and yes, even laptops. Impatient parents who do not care to wait for their school districts to catch on are a huge untapped market, much larger than early adopters, and even if they did not pay a dime of charity money with the purchase of their laptops, they provide an even more valuable service to the OLPC project by increasing the number of laptops that OLPC can order from their vendors, and driving down prices globally.