Intel, AMD Wage High-Stakes Battle Over Low-End Laptops

A tiff between the world's largest chipmaker and an organization selling low-priced laptops to the developing world will ultimately benefit poor kids, according to one tech aid expert.

"I think it's wonderful that Intel (Nasdaq: INTC) and OLPC [One Laptop Per Child] are now competing," Wayan Vota told LinuxInsider. Vota is editor of OLPC News and director of Geekcorps, a sort of Peace Corps for geeks based in Washington, D.C., which has partnered with Intel to deliver technology to emerging markets.

"The greatest thing about this," he continued, "is that it has increased the opportunities for these countries to experiment with computing and bring computing to some very tough environments.

"It's changing the landscape of what is a market for large computer companies," he added. "Market used to only refer to people in the U.S., Europe, Japan and South Korea. Now market is starting to refer to the entire world."

'Predatory' Practices

One Laptop Per Child is a nonprofit initiative started in 2005 by Massachusetts Institute of Technology professor Nicholas Negroponte. Its aim is to put a US$100 laptop in the hands of every kid in the developing world.

Although Intel initially scoffed at OLPC's mission, the chipmaker has changed its tune in recent times and has begun marketing its own inexpensive notebook, the Classmate, to the developing world. That move has created bad blood between OLPC and Intel.

Negroponte characterized Intel's Classmate program as "predatory" on the CBS television news show "60 Minutes" on Sunday. "Intel should be ashamed of itself," he declared. "It's just shameless."

During the broadcast, Intel Chairman Craig Barrett discounted Negroponte's accusations against the chipmaker. "We're not trying to drive him out of business," he observed. "We trying to bring capability to young people."

Caught in a Cross Fire

OLPC is being victimized, according to Vota, by the savage dislike between Intel and its chief competitor, Sunnyvale, Calif.-based AMD (NYSE: AMD), which makes the processor used by the OLPC laptop.

"Both companies are playing to win," he said, and for Intel, winning is keeping AMD from taking the lead in the emerging markets by selling laptops to schoolchildren.

"Intel is looking for a way to challenge that," he explained. "It doesn't want that challenge to destroy the idea, but it wants to be in the game also."

'Intel Being Intel'

"This is Intel being Intel," AMD spokesperson Mike Silverman told LinuxInsider.

"Intel attempted to belittle the One Laptop Per Child Project, but ultimately realized that Nicholas [Negroponte] was onto something here and couldn't stand to see AMD rather than Intel as the supplier here," he reasoned.

"Intel is using its monopoly power to engage in some very, very aggressive business practices to derail the One Laptop Per Child project," he added.

Marketing Savvy

However, Intel is also using some marketing savvy to sell its economical laptop to developing nations, Vota maintained.

Although Intel's Classmate is priced higher (more than $200) than the OLPC notebook ($175), it uses the Windows operating system, while the OLPC base unit uses Linux. That may make the Classmate more attractive to government buyers, Vota argued.

"If I'm a purchasing minister in one of these countries, which is the safer route: buying an untested, unknown machine that no one else has ever used, or buying an untested, unknown machine that also runs the software that I'm very familiar with?" he asked rhetorically.

He acknowledged, though, that the OLPC machine can run Windows, and Microsoft's (Nasdaq: MSFT) announcement of a $3 version of Windows for developing nations should help OLPC's marketing efforts.

Trickle Down Economics

Intel is manufacturing its Classmates in the countries in which they're sold, noted Vota. The OLPC laptop will be manufactured by Quanta Computer in China.

"OLPC, because they're so focused on making this $100 laptop price point, are going for volume with one manufacturer," he said. "So Quanta will get a big boost for this and you're not seeing any of the trickle down effect into local economies of having manufacturing based there."

Intel's education strategy may also have more appeal to emerging nations, he added.

OLPC was taking "The Gods Must Be Crazy" approach to education, said Vota, a reference to a 1980 film where a Coke bottle disrupts the life of a remote society.

"Negroponte wants to essentially drop the computers off at the country's doorstep and tell the country, 'You design how to put it in the classroom. Good luck,'" he maintained.

Bleeding on the Doorstep

Intel's hardware platform, Vota noted, is integrated with its World Ahead Program, a $1 billion effort to expand technology in the developing world.

Intel's program seems to have greater integration of teacher, classroom and computer, he said.

Whatever the outcome of the OLPC-Intel feud, the heat that it has generated has bolstered the cause of advocates like Vota.

"OLPC has moved the conversation about technology and development from its post dot-com malaise to front and center in the debate on how do we advance a country," he observed.

"A year or two ago, I couldn't get anyone to talk to me about this stuff if I bled on their doorstep," he declared. "But now I get callbacks in 20 minutes."