OLPC is in the midst of corporate reorganization, hardware difficulties, manufacturing and distribution challenges, and an overall dulling of their original vision as Nicholas Negroponte rails against "open source fundamentalism" and tries to further align himself with Microsoft.
According to Ars Technica,
There are many aspects of OLPC's plan that have contributed to its current predicament, but it seems obvious now that the project's extreme dependence on scale to bring down cost was deeply misguided. The project couldn't achieve the necessary manufacturing capacity or sales volume required to meet its target price and ended up in a position where it couldn't sustain itself in a free-market situation where other competitors are creating commercial products for the same space.
The sustainability of the OLPC model, or even its wisdom, have long been in question, even if the vision and altruism of its founders are beyond reproach. As the market for low-cost, kid-centric mobile computing explodes, it is becoming clearer that models of altruistic capitalism will be required to bring a lot of netbooks to market, especially markets that have previously been underserved. It has worked for Asus, HP and Dell are pushing into this space, and the second-generation Intel Classmate is a great product, even if it lacks some of the raw innovation of the XO.
Quite frankly, though, I can't help but think that all of this is OK. After all, the entire movement towards low-cost, realistic 1:1 computing began with OLPC. They started it. Good for them. Whether or not I agree with everything that Negroponte brings to the table, he and OLPC deserve huge kudos for driving these efforts and creating a market where competition is beginning to flourish. However, as the Ars article notes,
In light of the serious process and organizational problems that OLPC has encountered in its efforts to bring its technology to the market, it might make more sense at this point for them to leave the production, deployment, and sales process to companies that are better equipped to handle it.