Cheaper cheap laptop promised

Negroponte remains determined to realize vision

Nicholas Negroponte, founder of One Laptop Per Child, promises to cut the price of the XO by $24 and has hopes for an even lower price. (Globe Staff Photo / David L. Ryan)

The One Laptop Per Child Foundation of Cambridge was established to bring the world's children a $100 laptop, and according to founder Nicholas Negroponte, the organization is still determined to reach that goal. But last year, it quietly raised the price of its proprietary XO laptop from $188 to $204, more than twice what the foundation originally hoped to charge. Now Negroponte is promising to cut the price of the XO by $24, to $180. "I believe it will go down another $20 soon," he added. But even at $160, the laptop will cost far more than its original $100 target price.

The foundation offers its laptops for sale to governments of developing countries, which can then distribute the machines to poor school children. Negroponte said four countries that bought XO laptops last year - Mongolia, Rwanda, Peru, and Uruguay - agreed to pay $204 for each laptop. That's $16 more than the laptop's 2007 price of $188.

"The price floats," Negroponte said. "It floated up because of two primary reasons: cost of raw materials and value of the dollar."

But now, Negroponte said raw materials have gotten cheaper and the dollar, which sharply declined in value in late 2008, has recovered somewhat. That means it takes fewer dollars to buy the same quantity of goods in the Asian countries that supply components for the laptop.

Meanwhile, Negroponte's team is busy designing the sequel to the XO, a laptop that will feature a second screen that will take the place of the traditional keyboard. Negroponte hopes to have a prototype built within 18 months, and thinks computer makers will be able to produce the machine for even less than the current XO - perhaps as little as $75.

There's also a plan to provide free Internet access to XO users by piggybacking on cellular telephone and satellite systems in developing countries. "This world has lots of bandwidth that just goes unused," Negroponte said. "It's like standby seats on airplanes."

It's an ambitious agenda for the foundation, which recently dismissed about 32 workers - half of its staff - due to falling corporate donations and the disas trous decline in holiday sales of the XO laptop. Christopher Dawson, director of technology at the Athol-Royalston Regional School District, who blogs about educational technology at the ZDNet news site, said Negroponte's team went wrong by trying to produce and distribute the computer themselves instead of leaving that to private companies. "There are some great idea people at OLPC," said Dawson, "but they don't have the marketing and manufacturing skills to put it all together."

Negroponte said that when the foundation was launched in 2005, no company built a machine - a small device that uses little power and has a display screen that can easily be read under bright sunlight - suited for rural areas without easy access to electricity. "Four years ago, we had no choice," Negroponte said. "We had to build a laptop." So the group's engineers designed the machine of their dreams and contracted with Quanta Computer of Taiwan to manufacture it.

But then the foundation's plan garnered worldwide attention, helping to prompt computer makers like AsusTek Computer Inc., Acer Co., Hewlett-Packard Co., and Dell Inc. to produce their own small, cheap laptops, nicknamed "netbooks."

Chip maker Intel Corp., which for a time had an alliance with the foundation, has also made inroads with its own children's laptop, called the Classmate. Intel's machine sells for $300 to $400, more than the foundation's laptop, but Intel has done a better job of getting it into the hands of poor children. While fewer than a million foundation laptops have been issued, mostly to users in Peru and Uruguay, there are more than a million Classmates in use in 30 countries. Another one million Intel machines were ordered in September by Venezuela.

Where One Laptop hired a contractor to build its laptop, Intel created a basic design, then licensed computer makers in various countries to produce the machines. The Classmates for Venezuela are being made by a company in Portugal.

Negroponte plans to adopt Intel's approach with the second-generation XO laptop. Foundation engineers will create a basic design, then provide the blueprints free of charge to any manufacturer willing to mass produce it. Negroponte said he's spoken to several manufacturers who might be willing to sell the new laptop for less than $100 in developing countries, but at a higher price to consumers in affluent nations.

Negroponte's also rethinking the fountation's approach to software. The foundation originally invested heavily in Sugar, a modified version of the free Linux operating system. Sugar features a user interface inspired by research at the Massachusetts Institute of Technology into the ways young children learn, and is designed to encourage children to collaborate with one another as they master new skills. But the resulting interface has a look and feel that's very different from popular operating systems like Apple Inc.'s Macintosh OS or Microsoft Corp.'s Windows.

Some One Laptop critics said developing Sugar was like reinventing the wheel. Today, Negroponte admits the critics were right. "In retrospect, it wasn't necessary," he said. Last year, he disclosed an agreement with Microsoft to bring the Windows operating system to the XO laptop.

Walter Bender, who ran the Sugar design team at One Laptop, opposed the Microsoft alliance and resigned from the foundation. "Just giving kids a traditional desktop, whether it's a Linux desktop or a Windows desktop or a Mac desktop, that's inadequate," he said.

Bender now leads Sugar Labs, an independent group that will continue to develop the Sugar software.

One Laptop still works with Bender and will continue installing Sugar on its laptops, but as a program that runs on a more traditional operating system like Windows. This strategy shift helps explain last month's layoffs; many of the dismissed employees had been working on Sugar-related activities, which have now been shifted to Sugar Labs.

With Asus, Dell, and HP selling netbooks for as little as $200, there's some question as to whether the world still needs cheap computers from Negroponte's foundation.

"The market wouldn't much notice the passing of OLPC," said Roger Kay, a computer industry analyst at Endpoint Technologies Associates Inc. in Wayland.

But Negroponte said netbook profit margins are so thin manufacturers are desperate to boost their prices, and the foundaion plays a vital role in keeping computers affordable. "You step out, and it'll spring right back again," he said. "So in some sense you have an obligation to keep this downward pressure on price."

Hiawatha Bray can be reached at bray@globe.com.