OLPC announces price hike for "$100 Laptop"

The founder of the One Laptop Per Child (OLPC) programme that aims to provide an innovative portable computer to poor children around the world announced Thursday that they have made some major changes in the project.

Nicholas Negroponte, the former director of the Massachusetts Institute of Technology Media Lab who now heads the nonprofit One Laptop Per Child project, revealed yesterday that the machine, which was originally meant to run on an open-source operating system and sell for $100 each, will now also run a version of Microsoft's Windows operating system and cost $175 each.

The OLPC machine boasts extremely low electricity consumption, a pulley for hand-generated power, built-in wireless, and a screen with indoor and outdoor reading modes.

In a meeting with analysts in Cambridge, Massachusetts on Thursday, project creator Negroponte said that OLPC so far has orders for 2.5 million units, and that he had not yet succeeded in landing the three million orders for OLPC that were needed to get production started.

He said OLPC needs to reach 3 million units by May 30 in order to give its suppliers enough lead time to fill the pipeline with parts.

"We are at the most critical stage of OLPC's life," Negroponte said. "A year and a half ago, we were selling a dream, but it's easy to sell dreams if you're passionate and can share that passion with other people. But that was dreams, and now we've got to launch. We need to trigger a supply chain for three million units to get started, and need a few large agreements to kick it off."

Despite the fact that OLPC is running into difficulties, Negroponte still remains optimistic about its prospects, saying that new countries, including Peru and Russia, have shown interest in the project and inquired about taking part. He said that the governors of 19 U.S. states including Florida and Massachusetts also inquired about the project, a demand that has eased off his previous resistance to selling the machines in U.S. markets from "never" to "maybe."

OLPC has distributed about 200 beta versions of its little green-and-white "XO" computers to each of the seven countries, including Brazil, Argentina, Uruguay, Nigeria, Libya, Pakistan and Thailand that have committed to making bulk orders so far. The group has also shipped about 2,000 XO machines to software developers around the world.

Expressly designed for the world's poorest children living in the most remote environments, One Laptop per Child is a potent learning tool created collaboratively by experts from both academia and industry. The goal of the OLPC project is to create a durable, power-efficient notebook PC that is cheap enough for developing nations to use as a common classroom tool.

The Delaware based non-profit organization was set up to oversee The Children's Machine project announced at the World Economic Forum in Davos, Switzerland in January 2005.

It is funded by a number of sponsor organizations including, AMD, Brightstar Corporation, eBay, Google, Marvell, News Corporation, SES Global, Nortel Networks, and Red Hat.

OLPC would rapidly increase the production of the machines, reaching levels of 400,000 per month, once the group meets its sales goal. Taiwan based world’s largest producer of notebooks, Quanta Computer Inc., would produce 1 million laptops by the end of 2007, and 3 million within nine months of the launch (September 20, 2007), said Mary Lou Jepsen, the chief technology officer of OLPC.

"The manufacturing cost of these laptops is $175. We'll charge maybe $176 to cover the cost of these offices. Usually 50 percent of the cost of a laptop is sales and marketing, distribution and profit, but we don't have any of those things," Lou Jepsen said. He also committed that the group would readjust the price every business quarter, leading it to drop about 25 percent within a year.

Quanta agreed to take a profit of about $3 per machine, less than what it gets from other PC companies, Negroponte said.

He also disclosed that XO's developers have been working with software mogul Microsoft Corp. so a version of Windows can run on the machines as well. It could be the $3 software package, including Windows XP Starter Edition and some of Microsoft's "productivity" software, that the Redmond company announced last week for governments that subsidize student computers.

The lime-green-and-white machine features a string pulley to charge its batteries, with a minute of yanking yielding 10 minutes of electricity. The device, which relies on flash memory rather than a disk drive, also features a digital video camera, wireless connectivity and Linux open-source operating software tailored for remote regions. The display can switch from coloured to black-and-white for viewing in direct sunlight and the computer uses just two watts of power compared to the typical laptop's 30 to 40 watts.