Intel's Cheap Laptop Proposition

By now we've all heard quite a bit about MIT's One Laptop Per Child initiative, and its sub-$100 laptop. In order to reach such a low cost, the machine uses a slow and inexpensive AMD Geode processor, and runs Linux. Naturally, this has led Microsoft and Intel executives to call it "a gadget" and to insist that it is inadequate for children in developing nations.

Now Intel has backed up their statements with a plan to produce their own version of a cheap laptop computer for students in developing nations, called Edu-Wise. They claim that it will cost $400 or less, and will run some version of Microsoft Windows on an Intel processor faster than the AMD in MIT's inexpensive offering.

Another key differentiator between the two machines is that the MIT laptop uses 802.11 b/g wireless mesh networking to provide connectivity between machines, whereas the Intel laptop will include a WiMAX chip, allowing it to connect from much farther away from any access points and removing the requirement that it be used in a classroom setting.

While I understand Intel's claim that "that Wi-Max deployments will leapfrog stages of development in the nonindustrialized world," I find it somewhat dubious that the nonindustrialized world will gain access to WiMAX deployments any time soon. After all, there have only been minimal deployments of the technology even in industrialized areas, and widespread adoption does not appear to be imminent. The inclusion of WiMAX in an ultra-cheap device before it is even an option on high end equipment is an indication that this is little more than a stunt to keep developing nations from signing on with MIT's proposal, which happens to actually exist.

Another question is the actual cost. MIT promised a sub-$100 notebook, and have reported that it currently costs them $135 to build one. They haven't made their goal yet, but they're pretty close. On the other hand, Intel is starting from the $400 price point (which, by the way, is already what cheap laptops cost on the US market today), and their recent record with hitting price targets is not good. For example, the recent UMPC was projected to cost around $500, but is actually available for sale in the $1100 range. Engadget expects that Intel's new machines will cost close to $750, rather than $400. So the questions Intel has to answer are:

1. How is this machine an improvement over those that already exist at the same price point?
2. Is the announced price point remotely possible?
3. Is $400 affordable for students in developing nations?
   
4. Do students in developing nations really need more processing power than the AMD Geode can offer?
5. Do students in developing nations really need the expensive Microsoft Windows installed on their computers, or would they be better served by a Linux-based solution which would drive costs down?

At this time, none of these questions have been answered. The closest Microsoft or Intel will come to addressing these issues is to publish statements such as

"We don't think you cross the digital divide with old technology," he said. "It doesn't need exotic technology and it runs real applications."

made by Paul Otellini, which implies that they want to somehow use new (expensive) technology to address the demands of this new (poor) market.

This venture is doomed to fail. It is nothing but another scare tactic from Intel, designed to cripple its competitors without having to produce a competing product. They did the same thing with the Itanium, and it worked. Now they are doing it with Edu-Wise. A real product may or may come of this. If it does, it probably won't meet the announced price point. And even if it somehow does, it will still be too costly for the market they are trying to address. The real test of whether this is a successful move by Intel will be whether or not developing nations delay their purchases of the OLPC in favor of waiting for Intel's notebook. If that happens, Intel and Microsoft have already won (and they know this better than anyone).