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Intel The Almighty Buck Businesses Hardware

Why Intel and OLPC Parted Ways 393

runamock writes "The New York Times has an article that sheds some light on why Intel left the OLPC board: 'A frail partnership between Intel and the One Laptop Per Child educational computing group was undone last month in part by an Intel saleswoman: She tried to persuade a Peruvian official to drop the country's commitment to buy a quarter-million of the organization's laptops in favor of Intel PCs. Intel and the group had a rocky relationship from the start in their short-lived effort to get inexpensive laptops into the hands of the world's poorest children. But the saleswoman's tactic was the final straw for Nicholas Negroponte.'"
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Why Intel and OLPC Parted Ways

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  • No surprise here (Score:3, Interesting)

    by davmoo ( 63521 ) on Sunday January 06, 2008 @09:34AM (#21931610)
    I'm sure Intel is going to get lots of hate posts here. And most of that will be because a lot of people fail to see one important issue.

    Intel is a for-profit corporation beholden to its stock holders...no profit, stock holders get pissed, executives get thrown out. OLPC is a non-profit that doesn't have to worry about making money, and in fact can lose money as needed...no one is looking for a profit.

    The first reply I saw here made a comment about Intel throwing away good will by not selling OLPC chips at a big discount. Here's a news flash for you people...stock holders mostly don't give squat about good will. Good will does not increase the bottom line of their stock portfolio or give them a fat dividend check.

    Intel is not a charity. AMD can work with OLPC because AMD is in second place and is willing to do anything to *be* Intel. Likewise, Negroponte (I've gotta put that guy's name in my spell checker), while his goals are commendable and I really do hope OLPC succeeds, is not being realistic as far as the business side of it goes in regards to Intel.
  • by arigram ( 1202657 ) on Sunday January 06, 2008 @09:44AM (#21931662) Homepage
    You probably have heard the phrase "we are not a charity, we are a business" before, I am certain. Well, this is the case.

    OLPC is a charity, not a business.
    Intel is a business, not a charity.

    (using the word "charity" to get the phrase going, there are of course better sounding ones)

  • Re:No surprise here (Score:5, Interesting)

    by Anonymous Coward on Sunday January 06, 2008 @09:59AM (#21931730)
    Bullshit. Sorry!

    I'm sick and tired of this hard-nosed extreemist capitalist view. It's bullshit, pure and simple. Take a look at what you're actually saying - competing with and screwing over a charity is really bad form. You people need to remember that capitalism is NOT PERFECT, and worshipping it's principles as if they were the most fundamental rules in the universe is really dumb.
  • Re:No surprise here (Score:3, Interesting)

    by Anonymous Coward on Sunday January 06, 2008 @09:59AM (#21931732)
    "Good will does not increase the bottom line"

    Oh really? Is that why many annual reports will give good will a dollar value?

    Good will is an investment, generally a long term one. No surprise that the stock market is generally focused on short term profit.
  • by Znork ( 31774 ) on Sunday January 06, 2008 @10:12AM (#21931806)
    "Um... that sounds a bit spun doesn't it?"

    Maybe in favour of Intel? A more accurate headline, but one that could be construed as inflammatory would be:

    Intel attempts to subvert efforts to get computers to children.

    "the Intel machines it's trying to sell will still go to the same target audience as the OLPC units"

    For about twice the price. Which means half the number of units.

    "it's not like they suddenly hate kids!"

    Well, no. They just dont like kids quite as much as they like money.

    I don't particularly dislike Intel, but in this case I must say I find their behaviour offensive. This will go on their permanent record and get weighed in for future purchases.

    "I'd love to see other devices like the EEE PC tailored towards developing nations in the near future."

    In the long run, paving the ground for this device class is without a doubt the greatest contribution of the OLPC project.
  • by Dragonslicer ( 991472 ) on Sunday January 06, 2008 @10:19AM (#21931872)

    making a profit to keep the operation going
    Profit is not required to continue the OLPC program, only a lack of losing large amounts of money.
  • Re:Intel just sucks. (Score:3, Interesting)

    by bigstrat2003 ( 1058574 ) on Sunday January 06, 2008 @10:41AM (#21932038)
    It's kind of a dumb point anyway. Intel would certainly be like MS if it weren't for AMD, but that's true of pretty much any company. Apple would be just like MS if they had MS' market share, Madden has been declining in quality ever since EA got that exclusive license from the NFL, and so forth. Any company who has a monopoly is going to act like MS, so why single out Intel?
  • Re:No surprise here (Score:2, Interesting)

    by sjofi ( 307114 ) on Sunday January 06, 2008 @10:56AM (#21932136)
    selling goods at affordable prices in developing countries does not imply that the company would not make profit for it's shareholders doing so. look at mobile phones, in few short years the subscription base has risen to over 3b. That's half of the planets population and includes a lot of ppl in the developing countries. the trend is there is continuing, mobile phone prices are decreasing and are thus all the time more affordable.

    this has been possible because the mobile phone companies, most notably nokia, decided to serve these developing markets and design and produce cheap mobile phones. now you can go to nokia's financials and assess whether they're for-profit or not... intel, on the other hand, has chosen another approach: they're ignoring the poor of the world. they could've addressed the needs of this market for over a decade. and they could have done it profitably. instead they've simply chosen not to.
  • by Moraelin ( 679338 ) on Sunday January 06, 2008 @11:03AM (#21932176) Journal
    So basically they're a normal corporation, acting perfectly normally to create more value for its shareholders, eh?

    I mean, just like, say, Sun during Scott McNealy's CEO days, going "we love Linux and OSS" in the morning and "Linux is teh suck! Die! Die! Die!" in the evening of the same day? Or like IBM showing up at Athlon launches and proclaiming its undying love for AMD, then spending 100 million on developping an Intel-only chipset that nearly negated the advantage of AMD's IMC and hypertransport? Or like AOL using Netscape to negotiate a big subsidy from MS, essentially a huge corporate bribe to use IE instead of Netscape, then suing MS for anti-competitive behaviour against Netscape? Etc.

    Sad to say, that's just normal behaviour for corporations. Someone showing up at your product launches is more of a way for _them_ to be in the public's eye, than really meaning that they won't backstab you the next day.

    What's normal for normal people, isn't normal at all for corporations and viceversa. If someone acted like a corporation and showed up to proclaim his undying friendship in the morning, then tried to lead a mob with torches and pitchforks to your home in the evening, chances are we'd put them in a mental institution. But conversely, if a corporation tried to stay your best friend even if it loses them money, the shareholders would want heads to roll.

    To be entirely fair, though, it's also a mistake to see a corporation as one monolythic entity with only one brain. Just because department X thinks you're the best thing since sliced bread, doesn't mean that department Y won't try to backstab you. Sometimes even just because the manager of department X really just wants to undermine the manager of department Y.

    In some cases they even backstab each other. See, for example, the sad story of OS/2. One department developed it as an alternative to paying the Windows tax to MS. Another department refused to ship IBM computers with OS/2 installed, because they could get a bigger discount on Windows if they're MS-only on the computers they sell.

    Don't try to understand internal corporate politics, that-a-way lies madness of Lovecraft proportions.
  • by coolGuyZak ( 844482 ) on Sunday January 06, 2008 @11:12AM (#21932234)

    One problem is that there are so few people out there like Mr. Negroponte in the business world

    In my experience, there are tons of people in the business world like Mr. Negroponte. We don't hear about them for two reasons. First, they tend to be small business owners. Second, they tend not to do heinous things. The news goes for interesting stories, which excludes the small fry doing something nice for someone else.

  • truth be told (Score:1, Interesting)

    by ghyd ( 981064 ) on Sunday January 06, 2008 @11:51AM (#21932490)
    This article http://www.economist.com/science/displaystory.cfm?story_id=10472304 [economist.com] displays a very different, and more convincing, view of the OLPC failure than the ronpaulesque anti-corporate attitude in the comments here.
  • Re:Intel just sucks. (Score:3, Interesting)

    by Antique Geekmeister ( 740220 ) on Sunday January 06, 2008 @12:14PM (#21932662)
    No, they're not. Both Intel and Microsoft have a long, documented history of stealing work from other companies, then using the stolen goods to drive the other company out of business. And they double teamed DEC, with Intel stealing the Alpha technologies and Microsoft stealing the VMS technologies. They've both got far more of a history of this than their competitors.
  • Re:Intel just sucks. (Score:5, Interesting)

    by Locutus ( 9039 ) on Sunday January 06, 2008 @02:17PM (#21933652)
    if you had seen and used the XO, you might be more understanding. The XO is not a threat to Intel since it is designed for primary school kids and can only help grow that market for Intel's more powerful chips BEYOND primary school. What stunned me about this article as that Peru had already decided the XO was the best device for primary school kids and asked Intel to bid on the secondary school kids device. You know, once the primary age XO users move on into secondary school, they'll need a bit more powerful( CPU, memory, etc ) device. But instead of looking at the XO as a way to start their market growth and be happy with the secondary and beyond markets, the Intel saleswoman aggressively went for what wasn't even asked for, she tried to bid on the already made primary deal.

    So even after a few instructions to Intel Classmate PC sales executives telling them to tone down the competition with the XO, a high ranking salesperson does just that? What kind of money is Microsoft putting behind this in commission fees to push someone to go so far out of her way to try and lose one contract in hopes of killing off an XO contract already made?

    Oh, you probably don't know that Microsoft is behind the Classmate PC and yes, Bill Gates has stated many times to the public and press that he thinks the XO is a terrible idea and device. Microsoft and Intel quickly through the Classmate PC out there and claimed it was a comparable product. So I would not doubt that there is probably 100's of thousands of dollars in commission behind a Classmate PC win over an XO client.

    I also hope the press and public roasts Intel for being such assholes with a non-profit organization. Business or no business, attacking non-profits can cause major brand recognition issues. When "Intel Inside" becomes a black/blue eye on a childs face, they'll think twice about this Classmate PC thing. And I hope someone gets fired for this because for one, she screwed over Intel's shareholders by losing the deal she was supposed to be bidding on.

  • by ThePromenader ( 878501 ) on Sunday January 06, 2008 @04:17PM (#21934604) Homepage Journal
    Wait a second - I don't understand the particularities of the intel/MS agreement (why is an Intel rep pushing MS products only in their computers? Intel can run anything), but at least from the MS perspective, they're aiming for the long-term: they're attempting to wean unsuspecting children on MS products. Once "endoctrinated" in a certain product, and the majority of other users are using the same, people are usually loathe to change... MS knows this perfectly well.

    Intel's participation in this project would seem entirely against its very goals: 1) the laptops are not as cheap as other possibilities and 2) they only have their own interests at heart - not the children's, poor or not; in addition of their ability to impose "choice" on its citizens, government is a large source of quick cash for them - nothing more.
  • by Anonymous Coward on Sunday January 06, 2008 @04:26PM (#21934696)
    Sorry, that's not true. Intel is not selling PCs at all. They sell chips, chipsets, motherboards and things like that. Just like always. Intel does not sell Classmate PCs at all. Local companies manufacture them, and compete with each other. In Brazil, the government recently decided to go with Classmate instead of OLPC on a public auction. The winning bid wasn't Intel's, it was Positivo, a local PC manufacturer. The second place, mind you, was CCE, another PC manufacturer that also offered classmate. OLPC came in third place, without a local company.

    A classmate PC is no different that any other PC in that it is not an "Intel" box, but someone else's using some Intel parts.
  • by Pecisk ( 688001 ) on Sunday January 06, 2008 @04:49PM (#21934906)

    I already have said many times that Microsoft long time planning is overestimated. Nevertheless, with long term in my post I meant "long term profit". Microsoft wants huge profits as soon as possible. Therefore unfinished products, "good enough" attitude, total control of their "precious intellectual property" like file formats, etc. indicates that they are very short tempered and actually aren't that smart. However, they are very convinced about their truth and they believe in power of mighty dollar - so they simply buy everything. They buy PR companies, they buy journalists, they spend money like crazy. It is short term thinking, because lot of people have already became immune to such attitude. In long term, Microsoft is bound to damage itself seriously with such attitude.

    And if we are talking about Intel, they deserve bad press they get - AMD, RedHat, Quanta are also corps and not so small ones. However, they don't act so arrogantly as Intel does in this case.
  • Re:Intel just sucks. (Score:2, Interesting)

    by MortyKnox ( 699810 ) on Sunday January 06, 2008 @05:41PM (#21935348) Homepage
    I think allot of you are missing the point here, this is not about who gets to deliver the cpu of the OLPC, or any other hardware for that matter. If it was, why wouldn't Intel be making upgrade kits for these pc's, faster cpu's, more memory, improved NIC's, better graphic cards, heck, if they wanted to, they could've made replacement motherboards for upgrades. I'm sure Mr. Negroponte and OLPC would have been fine with that. Intel where even invited to make the OLPC-2, witch, if they won the deal, would have filled their coffers and made loads of money for their shareholders for the foreseeable future. Intel would have made a killer by doing what they're good at namely making chips. Even if they weren't affiliated in any way with OLPC, they still have a vested interest in the success of OLPC. The reason is that it would introduce kids to computers, that other ways would not have access to the technology, and in turn make the demand for hardware increase in the future.

    So, why don't Intel go for that, what could be their motive?
    I can only speculate, but doesn't anyone see a connection through the classmate PC and what software it runs? OLPC is running open source software, Classmate is running proprietary software, since the software doesn't care what chip it's run on, the only loosers would be the software companies not included in the OLPC. Today that unholy alliance is lead by a convicted monopolist, who is scared shitless by the thought that all the kids in South America, Africa and Asia are going to get their education on computers running free software!
    For a monopoly it's corporate suicide to let that happen, and in a true monopolistic way, they (M$)convince (pay) someone else (Intel) to do their dirty work.
  • by msevior ( 145103 ) on Sunday January 06, 2008 @06:22PM (#21935712)
    The G1G1 program raised 33 million which implies around 150,000 laptops ordered. Quanta won;t be able to supply them all until the end of January.

    The production lines are not sitting idle at all.

Man is an animal that makes bargains: no other animal does this-- no dog exchanges bones with another. -- Adam Smith