Intel's $320 Digital (Un)Divide(r)

You might be aware of digital visionary Nicholas Negroponte's One Laptop Per Child (OLPC) project as it has occupied a lot of headline space in recent times. However, the Intel Corporation has a similar initiative for bridging the digital divide that may prove to be more effective into getting into the hands of bottom-of-the-pyramid consumers, its Intel Classmate PC for emerging markets. The Intel website has more information on this computer, as does a dedicated website for the computer. According to the Intel blurb, their machine's objectives and advantages are the following:

The World Ahead Program from Intel Corporation aims to enhance lives by accelerating access to uncompromised technology for everyone, anywhere in the world. Focused on people in the world's developing communities, it integrates and extends Intel's efforts to advance progress in four areas: accessibility, connectivity, education, and content.

Intel has a long history of working to improve education worldwide and our ongoing programs prepare teachers and students for success in the global economy.

The Intel-based classmate pc is a small, mobile educational solution that Intel has developed specifically for students in emerging markets.

In the past twenty-five years, the popularization of personal computers (PCs) together with access to the Internet has had a profound effect on peoples' lives. However, only roughly 10% of current households in the emerging markets of Africa, SE Asia, Latin America, India, China and Russia currently have PCs.

The classmate pc is a revolutionary new device targeted at providing one computing solution per student in emerging markets, taking advantage of the education focus to deliver a product that provides great student education in a rugged industrial design intended for children.

Features:

• Designed for education
• Durable rugged design for children's day-to-day use
• Small, kid friendly, form factor for classroom use
• Easy to carry and light-weight
• Education-specific features
• Integrated software and hardware solution
• Learning through fun, collaboration and interaction
• Easy to deploy
• IA-based, runs on already available content, applications and operating systems with full compatibility to standard PC ecosystem

Plus, here is a BusinessWeek article that deals with Intel's comparative success so far in marketing its machine vis-a-vis Negroponte's efforts:

Intel wants to bridge the Digital Divide and pioneer a whole new market by filling classrooms in poor countries around the world with low-cost PCs. Priced at about $320 each, the new Classmate laptops on the desks in Malinalco are still too expensive for governments in most developing countries to purchase. Even so, they have allowed the chipmaker to steal a march on Massachusetts Institute of Technology professor Nicholas Negroponte, whose foundation, One Laptop per Child (OLPC), is on a mission to build easy-to-use, energy-efficient computers that will eventually sell for $100 or less. While Negroponte's OLPC is still trying to work out all the kinks in its XO laptop, now projected to cost $175, thousands of Intel Classmate machines have been rolling off the production line since March at a Chinese factory owned by Taiwanese manufacturer Elitegroup Computer Systems Co. (ECS). Intel already has trials under way in more than 10 countries, with 25 planned by yearend.

The contest between Intel and OLPC has been an odd one, not least because the two sides are so unevenly matched. In one corner stands one of the world's most powerful tech giants, and in the other, a tiny philanthropy that has drummed up modest backing from the likes of Google, eBay, News Corp., and Advanced Micro Devices. (AMC ) Negroponte has repeatedly criticized Intel for what he considers its hardball tactics. And yet the rivals may be ready to bury the hatchet: BusinessWeek has learned that Intel and OLPC executives are in talks regarding how they can work together.

It's unclear what the cooperation might involve. It's also not certain the two programs—either individually or in some kind of joint venture—will improve education or succeed in spreading useful technology through the developing world. But the race already has shed important light on how Intel plans to grapple with sluggish growth in the global PC market. The company's swift response to Negroponte also reveals how nimbly Intel can maneuver when necessary.

Under CEO Paul S. Otellini, Intel has been going through a painful transition. Its microprocessors still dominate the PC landscape, but the world of cell phones and other mobile gadgets is expanding much faster. Such products consume more chips than PCs do, perform many of the same functions, and are more popular throughout much of the world…

A marginal player in cellular markets, Intel must find a way to sell to the "next billion," industry lingo for consumers in the developing world who don't yet have easy access to the Internet. The education market—and products such as the Classmate—presents a major opportunity, says Martin Gilliland, Asia-Pacific research director for Gartner Inc. (IT ), because even if Intel's margins on such devices are razor-thin, volumes could soar into the hundreds of millions. Intel could expand the PC user base "not by fractions, but by high double-digit percentages," Gilliland says.

The first big challenge for Intel is bringing down the Classmate's costs. Unlike Negroponte's XO device, whose specially designed user interface aimed at first-time computer users is a deliberate break from the world of Intel chips and Microsoft software, Intel's machines are largely stripped-down versions of today's "Wintel" PCs. Intel's formidable clout with Asian parts suppliers lets it buy key components practically at cost, allowing it to shoot for a sub-$300 price tag. "We have chosen to ride on the existing technology curve and drive down the cost that way," says Michael T. Zhang, Intel's general manager working on the project in Shanghai.

So far, the approach seems to be working. Intel was able to move the Classmate PC from the drawing boards into production in less than 18 months. In early June, the company announced that it had enlisted Taiwan's Asustek Computer Inc. to make another laptop based on the Classmate design, but priced even lower, at $200. "This is what we do for a living," says L. Wilton Agatstein, the Intel vice-president in charge of the Classmate initiative. Perhaps more important, the project has forced Intel to expand its frame of reference beyond hardware. In Mexico and elsewhere, Intel bundles its Classmates with education software and teacher-training support. "That's something Intel needs to be credited for," says Gartner's Gilliland. "They have stretched beyond their normal area of interest without treading on anyone's toes."