Foreign Policy Blogs

Intel Splits with One Laptop Per Child

Intel is no longer on the board of the One Laptop Per Child initiative (OLPC). They are pulling all support and cooperation with the project – meaning that the next issue of the OLCP's XO laptop will not be using an Intel processor. The two organizations won't be collaborating on any new educational software, either. The tech media is reporting different reasons for the split – it could be that Intel just couldn't come up with a chip that met OLPC's needs – but it seems likely that Intel couldn't get along with OLPC's founder, Nicholas Negroponte. The Wall Street Journal wrote a great piece in November on the tensions between the two organizations. I think this is a good example of the tensions inherent in increasingly common public-private philanthropic partnerships – more on that in a bit.

First, a little background on OLPC and its relationship with Intel. Negroponte (who yes, is the brother of John Negroponte – the current Deputy Secretary of State and former Director of National Intelligence, UN Ambassador, and Ambassador to Iraq.) started OLPC in 2005, with the goal of producing $100 laptops (called the XO) for schoolchildren in the developing world and getting 150 million of them out the door by 2008. He believes that computers will help children to learn more, learn outside of school, and connect to one another better. OLPC hasn't achieved anything like those ambitious goals – the XO still costs $188 and Negroponte has only managed to sell a few hundred thousand of them to developing countries. Personally I think that's still doing pretty well, but the real accomplishment of OLPC has been to inspire other companies to try the same thing. Intel started making their own version (the Classmate) shortly after OLPC got going. The two bickered for a while about whose was best, and then decided to make friends six months ago. Intel joined the OLPC board, but the relationship continued to be rocky. Intel didn't stop selling the Classmate, which a lot of countries prefer because it is more powerful than the XO and can use Windows operating systems while the XO operates on Linux. Negroponte apparently demanded that Intel stop selling their own proprietary machine and make room in the market for the XO. Intel didn't appreciate his tone, and the two split up.

It's difficult to tell who's wrong here. Intel's point is that the Classmate isn't making them any money right now – they just want to maintain market share for their processors and maybe take advantage of new markets as they open up. Why should OLPC get a monopoly on the cheap, developing-world friendly laptop business? Why shouldn't education ministries get to choose which machine they want their children to use? But OLPC is facing a nasty problem in the market. The XO won't get down to $100 until production is high, and production won't be high until they get enough contracts to pay for it. The competition from Intel may ruin their chances of making the entire venture work. Emotion also plays a role here, at least for me. Intel is a giant, scary corporation, while OLPC is a plucky NGO with only 20 staff and no profit motive.

What I find interesting in all of this is that the reporting would be completely different if both organizations were companies. If Apple and Intel were both trying to make computers for children in poor countries, nobody would expect them to work together. Companies in competition with each other generally don't work together, that's just life. Somehow the fact that OLPC is an NGO is supposed to change the calculus, but it doesn't. Regardless of their tax status or beneficent ideals, OLPC needs to sell computers to accomplish its goals. That puts them in competition with Intel and anybody else who tries to sell computers in poor countries. This isn't a new problem; social marketing NGOs that sell condoms and anti-malaria bednets frequently come into competition with for-profit firms.

This competition isn't a bad thing. As the Wall Street Journal points out, Intel wouldn't have bothered developing the Classmate if OLPC hadn't threatened its global chip-production dominance. By providing a credible threat to Intel's bottom line, OLPC ensured that a major corporation with high production, development, and distribution capacities had to do something beneficial for poor children. Like it or not, NGOs and corporations are often in competition. This means that the proponents of public private partnerships for development have to not only identify opportunities for for-profit firms and NGOs to work together, they also have to negotiate between the parties to produce deals that benefits both and recognizes that they both have something to lose.

Note: I should say that I am an owner of an XO laptop. My wife and I gave one to my son this Christmas, and I think it's a great little machine. I have personal reservations on its use for educational development that I hope to discuss in a future post, but I think OLPC put together a terrific piece of technology and respect them a lot for it.



Kevin Dean

Kevin Dean is a graduate student pursuing a master's degree in international conflict management and humanitarian emergencies at Georgetown University. Before returning to school in Fall 2006, he spent six years working in the former Soviet Union - most of that time spent in Central Asia. He has managed a diverse range of international development programs for the US State Department and USAID. He has also consulted for several UN agencies and international NGOs, and is fluent in Russian. Kevin is originally from Des Moines, Iowa and studied Russian, East European, and Eurasian Studies at the University of Iowa.