Will Nicholas Negroponte Ever Understand That Competition Isn't About Killing OLPC?

from the get-over-it dept

We've never quite understood Nicholas Negroponte's position when it comes to the $100 Laptop/OLPC/XO (whatever it's called these days). While the idea behind creating a super cheap, super durable useful computer for children in developing nations is good, Negroponte has always approached the idea as one where only he should be allowed to see that vision through. When other companies decided it might be a good idea and wanted to target that market themselves, Negroponte flipped out and started attacking them for trying to undermine his project.

Sorry, Nicholas, but competition isn't undermining.

In fact, competition is generally what drives all parties to be better at what they do, in order to fend off the competition. Yet, somehow, the UK's Times Online has bought into Negroponte's side of the story and written up an article bashing Microsoft and Intel for trying to "kill" the OLPC. The article is riddled with factual errors and opinion substituting as fact, but the worst is in the central point of the article. The author mistakes companies all aiming for the same market as a nefarious attempt to "kill off" Negroponte's pet project -- as if he has some universal right to the market that no one else can attempt to enter. It also brushes over some simple facts, like the one where many countries have looked at the OLPC and realized it doesn't really serve their needs just yet. That, if anything, should be even more reason why competition is necessary. It helps create better products that actually serve the needs of people in those markets, rather than just what Negroponte decides they must want in his top-down manner.
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Filed Under: competition, execution, ideas, nicholas negroponte, olpc
Companies: amd, intel, microsoft, olpc

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  1. identicon
    Mark Beckford, 13 Aug 2008 @ 1:26pm

    From the horse's mouth

    Wow, this subject really strikes a never. I may be the only one who can speak from the trenches of the war between Negroponte and Intel. I was GM of the business group at Intel the created the Classmate PC from 2005 to 2006. The internally politics at Intel eventually forced me to move out from what I thought was a dream job at the time.

    First, I mostly agree with Mike on his points, although I think the reason Negroponte is so perplexed by competition is

    1) that he created this as a non-profit so "how can for-profit companies have the gall, especially monopolists, compete with me."

    2) his ego. I write about this particular subject as my blog's first post so read more hear if you'd like. http://tinyurl.com/6etf9t

    But some myths put forth here:
    * Intel considers Negroponte a competitive threat as long as they use AMD's chips. Regardless of his non-profit status. And there is nothing wrong with that. Competition is good. Will make all the products better and cheaper.

    * Intel will not sell below cost. Unless they've changed their business practices recently, they run this as a business to make money, albeit at lower margins. The most powerful group at Intel is finance (margins rule at Intel), and i had my controller breathing down my neck all the time for revenue/profitability.

    * Intel would love to work with Negroponte, but until he uses Intel chips, they will compete hard.

    * While Negroponte's OLPC is a non-profit, it tries to act as a business. All of its partners in the supply chain aren't doing this for charity. And I think he'd be much more successful turning this into a for-profit company who's profits get plowed into R&D, innovation, etc. Keep it private and allow people at the company to maintain reasonable salaries to retain talent. He's already got the access. In my view this would focus him on running this like a real business and force him to get the operations, product development, marketing, sales etc. to a point that is sustainable.

    * Yes, Intel wants to keep chip prices high, but i know for a fact they know the economics of commoditization. Paul Otellini told his executives to deal with the fact that we are going to have disposable $100 PC's at some point. They will milk the margins as long as possible, and may limit the Classmate's success (they limited it when I was there to avoid sell-down), but they do want to get kids laptops at an affordable price that makes them money.

    * Have Intel and Microsoft pursued shady tactics? Maybe, I but I don't know from experience. I didn't nor promote it at all. We just had aggressive sales people who were just doing there job.

    I'll stop here ... there is a lot of pent up anger and angst against the big established players. A standard part of the business for the big guys like Intel, Microsoft, etc.

    It should all be about bringing the best product and the best price to market. Competition is good for everybody.


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