The $100 laptop: What are the odds?

The $100 laptop: What are the odds?

Summary: Nicholas Negroponte's plan to distribute 150 million $100 laptops to third-world children by 2007 may be impossibly ambitious. But Microsoft ought to be paying attention anyway.

TOPICS: Laptops

Being the skeptic that I am, and having read, re-read, and re-read AGAIN David Berlind's article "Move over Microsoft, Dell. The $100 PC cometh. From MIT", I have to wonder if Nicholas Negroponte's vision is just that -- a grand vision of One Laptop per Child (the name of his not-for-profit organization), or if it is no more than an unattainable dream based more upon his faith in his fellow man than upon the realities of the twenty-first century. If it is the latter, well -- that would be unfortunate indeed.

If it is the former, it could be a nightmare for Bill Gates -- or it could be an irresistible opportunity to once again come from behind to totally dominate a world market. (Remember, Gates was a 20-something -- and the inventor of CP/M was not at home -- when IBM came-a-calling. With the help of IBM, Gates all but took over the PC marketplace. Then the word processing marketplace, then the spreadsheet marketplace, and on and on.)

Should Bill Gates view this vision as a threat? Oh, yes! But he should have had the same view of the ODF initiative adopted by Massachusetts. Somehow, he seems to have missed that one -- at least for now. Don't count him out just yet.

What is the goal? To put laptops in the hands of each of the third world's children --hundreds of millions of them.

How? By developing a high-tech sub-$100 laptop and selling it (en masse) to third world governments.

This high-tech device would run at such low power levels as to make hand-cranking it for power a viable option. (Important if you live in the jungle and have no electricity.) It would utilize a stripped-down version of Linux and be rugged enough to survive conditions most of us would find intolerable. Mr. Negroponte, the director of MIT's Media Lab, has managed to attract three big-time corporate sponsors-- AMD, RedHat, and Google. This collaboration alone should have gotten Microsoft's attention by now.

I would like to dispel a myth -- that a $100 PC is impossible. I am quite confident that, given the incentive, most any OEM can sell a $100 PC today. Don't believe me? Well, as recently as two years ago, I was running Windows XP on an aging laptop (Pentium II 366MHz, 128MB, 6GB HD, 800x600 TFT, Wi-Fi card) and doing just fine. No, it wasn't pretty. But, it was no slower -- and considerably more stable -- than the copy of Windows 98se that came with the system. My point? That today, such a lame system could easily be sold for under $100 -- should any vendor wish to do so -- especially at the volumes being proposed by Mr. Negroponte.

Would it be as high-tech or robust as MIT's $100 laptop? No, not by any means. So how can I compare the two, you ask? Because Mr. Negroponte's laptop is not really a $100 laptop. His claim is that it will cost $100 to produce in large volumes. (Presumably including shipping costs to the governments buying the laptops.) However, I expect that, collectively, MIT, AMD, RedHat, and Google will end up spending tens (if not hundreds) of millions of dollars before the first production laptop ships to the third world.

If you have spent any time at all in industry, you've heard of the old joke "We'll take a loss and make it up on volume." That's exactly what Mr. Negroponte and his sponsors are gambling on. Is it a safe gamble? I don't know.

Mr. Negroponte is counting in shipping 150 MILLION units a year by 2007. I would be surprised if any OEM has ever shipped even 10 million of any single model of any PC -- ever -- let alone 150 million. To be sure, shipping this many Linux laptops in a single year would swamp anything Microsoft (or any other IT vendor) has ever done single-handedly. Are you listening Bill?

The scale of Mr. Negroponte's vision is so grand that his sponsors would be foolish not to tap into it even if only 1% of that volume is ever attained. Still, like Microsoft, Mr. Negroponte's sponsors are obligated to their stockholders -- they too are in it for the money. The opportunity to rub Bill Gates' face in the mud is only gravy.

What exactly is Mr. Negroponte dependent upon to make his vision a reality?

The cooperation of foreign governments. Mr Negroponte has already lined up quite a few -- the most notable being China, with 220 million school children. This is a market that even Microsoft cannot ignore. Still, will China agree to distribute those machine only to school children? Will it resist the temptation to pass these computers out to the 'haves' instead of the 'have-nots'? Aside from language, will China insist on a different software configuration than Cambodia, or Brazil? Would China really accept a 'stripped-down' (some might say 'crippled') Linux software configuration?

A suitable consumer-friendly Linux platform. Developing such a platform is certainly within the capabilities of RedHat; but, to date, no Linux platform has made significant inroads into the consumer space. (At least not in the United States.) Still, it would be a huge blow for Microsoft if 220 million Chinese schoolchildren were to be brought up on Linux, now wouldn't it? I don't think Microsoft will let that happen.

A robust network infrastructure. The $100 PC will include peer-to-peer wireless networking and Mr. Negroponte assures us that third-world governments are moving forward to put in place robust wireless infrastructure. Certainly governments such as China's are quite capable of providing satellite-based networks throughout their countries, but how fast can cash-strapped third-world governments provide satellite downlinks and other suitable wireless infrastructure for jungle villages without electricity? Will the $100 PC be capable of direct-to-satellite communications? Will these services be provided for free? If both these questions can be answered YES, then fine but, if not... Without access to the Internet, small mesh networks between schoolchildren will be of limited value. Google's interest in this project may quickly wane if that network infrastructure is not in place.

Production capacity. Can Mr. Negroponte find sufficient production capacity to produce 150 million high-tech laptops per year, starting in 2007? Worldwide PC shipments for 2004 were 177.5 million units so Mr. Negroponte is talking about increasing worldwide production of PCs by as much as 85% over 2004 in the next two years. Either there is great deal of excess production capacity available or Mr. Negroponte and his sponsors are going to have to build some. Has this been factored into the cost of that $100 PC?

And at home ... that Linux does not falter in the courts. Sure, it's a long shot but ... If SCO prevails in court to the extent that any significant portion of Linux is found to be infringing on SCO intellectual property rights -- or worse that the GPL itself falters as a viable licensing mechanism, Mr. Negroponte's entire project may collapse around him. This is a very unlikely outcome but it cannot be dismissed entirely.

Based upon David's article, the technical challenges of producing a fully functional human-powered wireless laptop computer have been met and Mr. Negroponte has identified a customer base of staggering proportions. But the challenges of delivering this many PCs on an annual basis make this a daunting task.

As for Microsoft ...

Neither Mr. Negroponte nor David Berlind should count them out just yet. I believe it was last year that Steve Ballmer first brought up the magical $100 PC price-point for the third world and he indicated that Microsoft was considering a stripped-down "Starter Edition" of Windows. Just a couple of weeks ago, the line-up of planned Vista editions was announced and included (Guess what?) a "Starter Edition" which might just might fit the bill as a third world Linux killer.

Can Microsoft ignore the OLPC initiative started by Mr. Negroponte and his sponsors? No, absolutely not. Why? Because they cannot afford to have such a large portion of worldwide PC sales going to Linux.

While I am skeptical that this project will ever get any farther than it has already (which, from a technical standpoint, is quite a lot) -- meeting just one percent of its target goal, the project will have been worthwhile for all parties concerned. If Mr. Negroponte can meet ten percent of his target goals, he will have accomplished more than most men hope for in a lifetime.

Topic: Laptops

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  • Dell doesn't make laptops

    Dell has to buy laptops from other companies.
  • You get what you pay for!

    Most of the time anyway, often you get less than you pay for, .02% of the time you get more than what you pay for.
    Reverend MacFellow
    • Steve Ballmer did discuss the $100 pc.

      Bill Gates has acknowledged that in some parts of the world people cannot afford to pay full price for Windows.

      Microsoft has been making stripped down versions of Windows for some time now.

      Microsoft has a great deal of capital to invest.

      Let's take all that seriously.

      If the hardware exists, why must it run a version of Linux?

      Remember one reason desktop Linux goes nowhere is that most people first come in contact with computers running Windows. In some areas of the world, pirate copies.
      That gives them the expectation that computers will run as Windows runs, and that any alternative is minor and second rate.
      When they have more money, they expect to keep right on using Windows.

      You've looked at exactly the reasons Microsoft would benefit from providing $100 to everyone in the world who can't afford more.

      Why shouldn't they?
      Anton Philidor
      • Re: Microsoft

        "Microsoft has been making stripped down versions of Windows for some time now."

        Emphasis on [b]stripped down.[/b] Windows is probably the most horrible option of all for the low-end market. They may be a good option for regular computers, but not for ones that are expected to be in the $100 price range.

        "That gives them the expectation that computers will run as Windows runs"

        Guess what runs more like Windows for sub-$100 prices? It's not the stripped-down Windows, it's Linux.

        I daresay that when it comes to dirt-priced computers, Linux will probably rule. Who wants to live with the artificial limitations of one of those stripped-down versions of Windows, when you have have all the functionality of a real OS with Linux?
        • Perception rules.

          Windows is the world's software. If you're going to have a computer, you have Windows.

          Imagine a comment by someone far distant from a large urban center:
          Yes, X has a computer, but it's not a real one. Has something called linsux. Mine has Windows!

          By the way, note from the article that the developer of the $100 pc under discussion said it runs a stripped down version of Linux.

          No complete operating system need apply.
          Anton Philidor
          • Fun time!

            "[B]Windows is the world's software. If you're going to have a computer, you have Windows.[/B]"

            Tell that to all the Linux using and Mac using folks out there. And there are a lot that do not have Windows and many that have never touched a Windows PC and have been doing just fine.

            "[B]Imagine a comment by someone far distant from a large urban center:
            Yes, X has a computer, but it's not a real one. Has something called linsux. Mine has Windows![/B]"

            What the hell are you blathering about? You been reading to much Loverock? Now you are using his "cute" name for Linux, or was that a Freudian slip?

            "[B]By the way, note from the article that the developer of the $100 pc under discussion said it runs a stripped down version of Linux.

            No complete operating system need apply[/B]"

            What is a stripped down version of Linux? Simple, no server software or applications. Only what is needed for desktop and internet operations with no application opening limitations. Also the ability to expand that system still remains. So if the little blighters are feeling frisky they can improve and add to their systems. You can't really do that with a stripped version of Microsoft Windows.

            Anton, give up. Linux wins here and it will continue to win in these situations. It's a fact. Microsoft had it's hey day now it's in a slow decline and it has noone to blame but itself. Remember you said perception is everything. And the people now are perceiveing Microsoft as incompetent and dangerous and no longer fun.

            Mac and Linux are the new kids on the block. Mac with it's phenomonal innovations that put it years ahead of Linux, and Microsoft. And Linux with it's $0.00 cost to own and use as well as it's scalability, flexibility and the fact that it has more language options that Microsoft and doesn't try to force users into using English like Microsoft has in the past.

            Bottom line is Microsoft is going down not away but like IBM and other before, they are going down.
            Linux User 147560
          • Let me qualify a statement before you or others

            take it out of context.

            "[I]Simple, no server software or applications.[/I]"

            This is meant as no server software and no server applications, which is really one and the same but just how I worded it.
            Linux User 147560
          • Stripped with Modifiying abilitys

            I believe when he said strip down he mean no multimedia and the such. However with the time these can be added to and thats for little of nothing.
            Blues Penguin
        • Real reason Linux user like don't

          want the laptop to be able to run Windows: Becuase it will be running Windows. How many of these 100.00 laptops will suddenly have a pirated copy of Windows on it? Does it matter? It would through water in the face of those who believe that EVERYBODY actually wants Linux....
          As for the "dirt-priced computers, Linux will probably rule." your absolutely correct!
          just long enough to get a copy of Windows on it...
          John Zern
          • Wishful thinking...

            the majority of poor people are not motivated enough to install a new OS. From my experience and what I have seen, the majority of end users just use what they have as is.
            Linux User 147560
          • Like 0 Percent of them

            These use IDE Flash Modules (As an Example) instead of a Hardrive . Unless you can run Windows in Less than 128 MB of drive space none of these will have Pirated Windows.

            Now there are several 50-60 MB Linux Distros with GUIS and Quite A Few Apps - here is one - It has JWM and ROX Filer as the for the desktop/file manager (Looks and behaves a lot like Win 95), AbiWord (Able to Open, Edit, and Save as MS Word), Gnumeric (Able to Open, Edit, and Save in Excel), Mozilla for Web browsing-email-WYSIWG web page editing/design-ICQ, GAIm for chat, Xfinans for personal acounting, MTPaint for Images, SodiPodi for SVG Drawing, Figurine for simple drawings, DIA for Flowcharts, Scribus for DTP, iCal-Agenda for calender, GXine Multimedia Player, and also comes with some odds and ends, like a personal webserver, Lite-DB, and 5 games. All that in 60MB leaving 68MB for data... and there are others like that one. Yep, they sure will be pirating MS on that 128 MB Flash Drive... NOT!
      • That's the point ...

        Microsoft sells Windows to its employees for $35 a copy. It probably sells Windows to its OEMs for less than that! If it really exists, Microsoft is NOT going to ignore a customer base this large. BUT, as long as there is pent-up demand for more powerful workstations, it will be very difficult to free-up production capacity at the $100 price point.
        M Wagner
        • Microsoft doesn't manufacture computers.

          They also don't have any expense for each additional OEM copy.

          Any money they make on computers sold to those who could not afford any but a pirate copy is new revenue for them. As well as great advertising for the future.

          So if Microsoft hired (for a share of revenues) an organization to vet manufacturing companies that apply to create $100 pc's and to control the manufacturing and distribution, they'd be looking at a substantial profit increase for years to come.

          Sounds good to me.
          Anton Philidor
          • Licensing Windows to a manufacturer is even better.

            Microsoft has learned lessons from the XBox.
            Anton Philidor
          • But there is a problem with this logic.

            and that is the $100.00 PC's will no longer be $100.00. They will be more based on what Microsoft would charge for the OS. Even if it's $5.00 more it defeats the purpose.

            With Linux and FreeBSD (read PCBSD) it's 100% free of cost for the user. So the $100.00 system is still $100.00 with a butt ton more of software and usability that what Microsoft would offer.
            Linux User 147560
      • Anton this is an easy one!

        because Linux and all the accompaning software is 100% free as in no cost! Gee! How hard was that?
        Linux User 147560
        • Hit the $100 price point...

          ... and Microsoft's share of the sale is irrelevant.

          Too easy.

          The price of parts comes down with volume. If the project can be done, there's enough money for Microsoft when the total volume is 100's of millions.
          Anton Philidor
          • Read my other reply

            bottom line is as soon as Microsoft starts to add their charges either the hardware vendors will have to take it in the shorts or the manufactures will. And it will increase the cost past the $100.00 mark unless someone else takes the hit. As it is the hardware folks are on a razors edge for profit now.
            Linux User 147560
  • Is it possible? Sure. But will anyone _want_ it ?

    You could build a new $100 car if you wanted, but would anyone want it?
    • Negroponte's argument ...

      ... is that if you have nothing else you will want it but I am not so sure.
      M Wagner