One Laptop Per Child: Charity, Prosperity, & Capitalism In The Developing World
by Ryan Smith on August 8, 2007 12:00 PM EST- Posted in
- Laptops
AMD's Stake
As we've alluded to in the title, the OLPC is about charity, prosperity, and capitalism. The software is the charity, the end results of the program are the prosperity, and the companies backing the OLPC like AMD are the capitalism. AMD has made it clear in press and business reports how it intends to leverage the XO-1 and its own technologies for business purposes, so we'd like to touch on exactly what AMD's stake is in everything.
There are two real extremes in turning a profit in the computer chip industry. One is to sell a small number of high profit chips; this is the server industry, where AMD has not had the best of luck lately (though Opteron did pretty well back in Intel's NetBurst days). The other is to sell a large number of low profit chips, an area that is traditionally represented by AMD, though at times they have been victim to these low profits being a little too low.
While not in any way giving up on the high-end, AMD is also looking to capitalize on expanding their stake in the low-end, looking for new markets in that area instead of taking Intel on directly. The focal point of that desire is the AMD 50x15 program, an initiative to bring internet access to 50% of the world's population by 2015. Participating in the OLPC program is one such way to reach that goal, but the OLPC program will never ship enough laptops on its own to reach that goal, never mind that as a non-profit program AMD will not be making any money on the XO-1.
However, much of the first 50% is composed of developing societies that have rapidly growing economies, improving electricity coverage, and an expanding middle class. In other words, there are a lot of people finally entering financial situations where they have the kind of income to afford luxury goods like computers. Over the past two years, and again reiterated in their Q2'07 financial report and even by Hector Ruiz himself on CNBC, AMD has stated their intentions to claim a large piece of the computer market that is forming in these societies as one of their profitable enterprises.
Getting into these markets requires computers priced similar to the XO-1, which is why AMD believes they have an advantage over Intel in this pursuit. The XO-1 is a roadmap for how to build such a computer today, and AMD intends to follow it after their first effort, the Personal Internet Communicator, failed to take off. Thanks to the XO-1 AMD can already build a computer to meet their immediate goals, and we'd imagine they're looking forward to Quanta's XO-1 variant going on sale.
AMD's story doesn't end there, as reaching their 2015 goal will also require new technology. As far as the $100 price target is concerned, the holy grail is a complete x86 system-on-chip as a SoC minimizes the number of parts that need to be manufactured and the electronics needed to connect them. Their current Geode processor is close to this in design, but is heavily lacking in performance due to its decade-old design. AMD has decided not to try to further upgrade the Geode and instead build a new SoC x86 processor, culminating in Fusion.
As we saw last week in AMD's Analyst Day presentation, AMD announced Bobcat, their ultra-low-power ultra-simple x86 processor intended for mobile devices. When put in a Fusion design with a proper low-power graphics core and Northbridge, a Fusion Bobcat will be capable of power usage similar to the current Geode, but with far better performance in all areas. This is critical for entering the mass market in developing nations, as users will want to use more mainstream software than the Geode can handle.
Keep in mind, none of this is to vilify AMD. Capitalism is a very powerful force to drive and spread progress. AMD's 50x15 goal is extremely lofty and not everything is in their hands, but from what we've seen with their technology they're going to be able to create the chips they need to reach their goal. This ultimately results in many students and children benefiting today from the XO-1, many more people tomorrow from Fusion Bobcat, and then yet again more in the future when Fusion Bobcat finds its way into the successor to the XO-1. It's only a question of whether or not AMD can make the kinds of profit they're shooting for from this project that remains to be seen.
Facebook
Twitter
RSS
22 Comments
View All Comments
Zan Lynx - Monday, August 13, 2007 - link
I have to wonder if any complainers have researched what regular school books and supplies cost these countries that are planning to purchase OLPC systems.I haven't either, but considering what my college text books cost, I imagine that over the projected life of the OLPC system it will be cheaper than providing actual printed textbooks and study guides.
I know people like to think of bureaucrats as venal and/or stupid, but I happen to know a few and they are not. So I think the burden of proof is on those claiming its a bad idea, rather than accepting that the people in charge of the project in these countries don't know what they're doing.
0roo0roo - Thursday, August 16, 2007 - link
well its not very intelligent to assume poor countries have to buy text books at our college text prices. you do know our college texts are seriously over priced and its a racket right? they keep putting out new editions so the professors and companies can keep raking in the money and keep the used textbooks from taking over. even small governments can afford to write basic school texts, we aren't talking cutting edge science texts here. basic math and language, the texts will last for years, paper is cheap, books can be passed down from classroom to classroom.0roo0roo - Thursday, August 16, 2007 - link
now imagine all the money that has been spent on this project were instead put towards writing decent textbooks for such countries and keeping it up to date. it would be a fraction of the cost of creating the infrastructure manufacturing and research for this gadget. open source textbooks how about that? no royalties. print them off in china, how much do you think one would cost? 1 dollar a book?
creathir - Thursday, August 9, 2007 - link
I find it surprising that your article does not mention the fact that 1 million units must be purchased by the purchasing government.That $75 difference would mean a $75 million price difference... quite a bit if you ask me.
This project is one of those "feel good" projects which I have not liked from the beginning. It was designed for areas without a stable power grid (hence the hand crank) but I would think they would need stable power before a computer to surf the Internet, not to mention the infrastructure and bandwidth needs to connect to the Internet.
This thing is such a joke.
- Creathir
jevans64 - Saturday, August 11, 2007 - link
A million of them are going to Nigeria and are going to be used for Phishing.Dfere - Thursday, August 9, 2007 - link
"Education still remains as one of the greatest factors in creating and ensuring prosperity, and expanding it is one of the best ways to improve a developing country"Yet look at the countries like Greece in the lineup? I didn't think they were third world. And third world countries need a stable government for economic growth first and education second. Perhaps the message of the market for the OLPC is just not clear enough. Perhaps I have not been able to figure this out on my own. But I wonder, is it possible that the backers do not have a clear idea of the market they make this "project" for? Time to market is terrible, especially given that it uses existing technology. How can there be success in this case, even if success is charitable cause as there have been no shipments....
This is not a venture I would back with my own money. And as a cause to end world illiteracy, it has currently done nothing. I am not sure where extra teachers would not be a better answer in second world countries.
I am cynical, this project certainly makes for great PR and I cannot help but think that the marketing and branding being exported to lower income areas of second world countries is the ultimate goal of the companies involved and is the return they seek. Much like companies in America that get involved with (and oweners of companies become board members with) the United Way.
Great Googly Moogly - Thursday, August 9, 2007 - link
This will be the biggest flop since IT/Ginger. What an awful waste of developing countries' funds (they will be the ones paying for these after all). Charity? Hardly.stmok - Thursday, August 9, 2007 - link
I got to try one of these when they were at the Linux Conference here in Sydney, (earlier this year).The screen has an additional benefit. You can still see whatever's on the screen in direct sunlight. NONE of OLPC's competitors has the same capability.
As for ASUS Eee PC, its not a direct competitor. They're (ASUS) are aiming for a slightly different market. OLPC is expressly for developing countries. Eee PC is for anyone else who can afford a low cost mobile solution. (Its far more powerful, but less ruggered). So anyone in a developed country can get one. (assuming they can make enough of them!)
Interesting to see that in both cases, they use Linux as their default OS.
Justin Case - Wednesday, August 8, 2007 - link
The summary on the main page says "One Child per Laptop Program". Unless it's some sort of breeding program, I think that's the other way around.Ryan Smith - Wednesday, August 8, 2007 - link
Well we will have an article on that next week on our sister site BioTech...Anyhow, thanks for the notice. This is why working at night is not always the brightest idea.