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Extra11/29/2007 12:01 AM ET

Why the '$100 laptop' project is under siege

The dream of cheap computers in the hands of millions of poor children is becoming a reality, though not exactly as its proponents imagined. For-profit competitors snatched the idea and have run with it.

By The Wall Street Journal

In 2005, Nicholas Negroponte unveiled an idea for bridging the technology divide between rich nations and the developing world. It was captivating in its utter simplicity: Design a $100 laptop and, within four years, get it into the hands of up to 150 million of the world's poorest schoolchildren.

World leaders and corporate benefactors jumped in to support the nonprofit project, called One Laptop Per Child. Negroponte, a professor on leave from the Massachusetts Institute of Technology, hopscotched the world collecting pledges from developing nations to buy the laptops in bulk.

But nearly three years later, only about 2,000 students in pilot programs have received computers from the One Laptop project.

An order from Uruguay for 100,000 machines appears to be the only solid deal to date with a country, although Negroponte says he's on the verge of sealing an order from Peru for 250,000. The first mass-production run, which began this month in China, is for 300,000 laptops, tens of thousands of which are slated to go to U.S. consumers.

Negroponte's goal of 150 million users by the end of 2008 looks unattainable.

His ambitious plan has been derailed, in part, by the power of his idea.

For-profit companies threatened by the projected $100 price tag set off at a sprint to develop their own dirt-cheap machines, plunging Negroponte into unexpected competition against well-known brands such as Intel (INTC, news, msgs) and Microsoft's (MSFT, news, msgs) Windows operating system. (Microsoft owns and publishes MSN Money.)

A rugged, innovative laptop

A version of Negroponte's vision is starting to come true. Impoverished countries are indeed snapping up cheap laptops for their schoolchildren -- just not anywhere near as many of his as he expected. They now have several cut-price models to choose from, raising the possibility that One Laptop Per Child, or OLPC, will end up as a niche player.

"I'm not good at selling laptops," Negroponte has told colleagues. "I'm good at selling ideas."

"From my point of view, if the world were to have 30 million" laptops made by competitors "in the hands of children at the end of next year, that to me would be a great success," he said in a recent interview. "My goal is not selling laptops. OLPC is not in the laptop business. It's in the education business."

From its inception, One Laptop Per Child posed a threat to the personal-computing dominance of software giant Microsoft and chip maker Intel. Negroponte's team, drawn from MIT, designed a machine that didn't use Windows or Intel chips. It uses the Linux operating system and other nonproprietary, open-source software, which users are allowed to tinker with.

Last year, Intel, which normally doesn't sell computers, introduced a small laptop for developing countries called the Classmate, which currently goes for between $230 and $300. It has marketed the computer aggressively, although it stands to make little money on the initiative. But it hopes to prevent rival Advanced Micro Devices (AMD, news, msgs), or AMD, whose chips are in Negroponte's competing computer, from becoming a standard in the developing world.

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Low-cost computing © Corbis
Laptops for children
The inexpensive computer boasts built-in wireless networking, a user interface designed for kids and requires little power, says Nicholas Negroponte, founder of One Laptop Per Child.
By most accounts, Negroponte and his 20-member team have created a rugged, innovative laptop with good software for learning. The small green-and-white device is designed to operate on very little power -- a small solar panel can keep it going -- and to resist rain and dust. Its unique, high-resolution screen stays bright even in direct sunlight. The laptop has a built-in video camera and connects wirelessly to the Internet and to other laptops of its kind.

But the project has hit snags. The $100 price target is proving difficult to hit, although Negroponte's team has succeeded in creating a device that's cheaper than other laptops. It now sells for $188, plus shipping. Potential buyers in the developing world have expressed concern about the availability of training for schoolteachers, and after-sales support. Negroponte's plan is for the machines to be simple enough that students can train themselves -- and solve any glitches that arise.

Second thoughts for some

Some potential buyers are having second thoughts about One Laptop Per Child. Officials in Libya, who had planned to buy up to 1.2 million of the laptops, became concerned that the machines lacked Windows, and that service, teacher training and future upgrades might become a problem.

"The Intel machine is a lot better than the OLPC," says Mohamed Bani, who chairs Libya's technical advisory committee but doesn't have the final say on buying laptops. "I don't want my country to be a junkyard for these machines." Libya has decided buy at least 150,000 Intel Classmates. The future of the One Laptop program there is now uncertain.

The 63-year-old Negroponte is a computer-science expert and veteran technology investor. He co-founded and formerly directed the MIT Media Laboratory and helped originate Wired magazine. He serves on the board of Motorola (MOT, news, msgs). Recently, he was selected by News Corp. (NWS, news, msgs) to serve on a committee to protect the editorial integrity of Dow Jones, the owner of The Wall Street Journal, following News Corp.'s agreement to purchase the company. His brother is U.S. Deputy Secretary of State John Negroponte.

Continued: Intel appears to be winning

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