Windows wants in on the $200 laptop

The price of OLPC computer went up from $100 to $188 and their justification is cost of production.

It is getting really suspicious especially when we don't see enough open reporting from a non-profit organization.

Now if the reason is to collect more funds to build more units to give to countries that can't come up with the money, that is a different story and I don't think any one would mind or care.

But, if the increase in price is to make it suitable enough for MS to offer it with Windows, that is not appropriate and unacceptable. That would be shenanigan and bluntly cheating.

I have a problem with Microsoft's request/demand, for one simple reason. They've done everything they can (including criminal acts--remember, convicted monopoly here) to close off the pre-installed market to everything but Windows, and now they want OLPC to open up?

I hope Negroponte has the intestinal fortitude to tell them where to shove it.

Quoting:I hope Negroponte has the intestinal fortitude to tell them where to shove it

I appreciate your point and even with my high despise to MS, I still believe in open competition.

My point I was making is, the OLPC group keeps increasing the hardware resources of the computer and consequently increasing the price. They cite monetary exchange rates. I don't believe that is the case since China's money is partially based on the US Dollar.

If the added resource are needed for Linux to run better, they are not saying so. I believe Negroponte Is increasing resource for Windows to be able to run on it. Remember there were meetings between Negroponte and MS. I believe the resource issue was a major one that was discussed.

OLPC shouldn't be accommodating for Windows. MS can have their own.

Abe, thanks for the ground work on encapsulating my thesis:

"No open competition for those who try to stifle it."

Maybe Negroponte is trying to boost it enough to get it to run Windows? If so, he'll lose my support completely. He'll be just another laptop maker, as far as I'm concerned.

Quoting:He'll be just another laptop maker, as far as I'm concerned.

May be he is heading this way, otherwise, why would he quit the MIT Media Lab!

Quoting:They cite monetary exchange rates

Compared to the Euro or British pound, horseshit indeed. I looked it up, and back when Negroponte first told about the $100 dollar laptop in an e-mail, january 2005 according to their own timeline, one US Dollar was equal to 1,35 Euro. Today that's 1,39 Euro, a difference less than 4%. Same for the British pound, though not sure about Chinese money.

Quoting:one US Dollar was equal to 1,35 Euro. Today that's 1,39 Euro

Hkwint, Isn't the other way around? 1 Euro equals $1.35?

GWB would love your figures. :)

Quoting:Compared to the Euro or British pound, horseshit indeed.

Yes, but we're not comparing against Pounds or Euros here, but against Yuans. http://www.x-rates.com tells me that the dollar has dropped about 10% since Jan. 2005 in comparison to the Yuan. Factor in about another 10% increase in price due to inflation and general booming in China. Then don't take the $100 as a starting point but the $150 that the first few batches were going to cost ($100 was the long term goal for large volumes).

$150 * 1.1 exchange rate * 1.1 inflation = $181.50. That's only $6.50 off the mark of todays quoted price of $188. That ain't too bad, really.

Quoting:$150 * 1.1 exchange rate * 1.1 inflation = $181.50. That's only $6.50 off the mark of todays quoted price of $188. That ain't too bad, really.

I didn't check your math, but it seems to be corrrect, but I have couple questions that still bother me.

1. Why was there increase from $100 to $150? Wasn't that because of more resources? Or was it inflation and such also?

2. Where did you get the 10% inflation in China? Is that from a reliable source?

3. And most importantly, how do you reconcile the increase in cost of the OLPC while every other computer, electronics gadget, device, or product made in China or The Far East in general went down in cost?

I am puzzled?

China has been exporting deflation for the last 15 years or so by keeping the yuan pegged to the dollar (they have adjusted it higher once or twice but they won't float it). The price increase is either due to an overly optimistic estimate or due to increased hardware performance.

Quoting:1. Why was there increase from $100 to $150? Wasn't that because of more resources? Or was it inflation and such also?

Nicholas Negroponte has always said that the $100 laptop would cost well over $100 in the beginning, and that the $100 mark would only be attained after several large production runs. It's nothing new, really.

Quoting:2. Where did you get the 10% inflation in China? Is that from a reliable source?

Nope, that's just a guesstimate for 3-4 years of economic boom in China and bad results in the US. But even pegging this at 5% or 0% would lead to a laptop cost of $173.25 or $165 respectively. Not too far away from $188.

Quoting:3. And most importantly, how do you reconcile the increase in cost of the OLPC while every other computer, electronics gadget, device, or product made in China or The Far East in general went down in cost?

Cost generally drops because there are either new models comming out pegged at or above the price of the old hardware, or because large production runs make the hardware cheaper. The XO was designed for 2007 hardware, not 2004-2005 hardware and contains lots of parts that aren't "standard" in the computer industry but are specialty items for the XO (Screen, Wifi, etcetera). There's no benefit of scale yet (until the XO goes into full production, which will drive the cost of later XO's down) and most parts do not have newer versions that drive down the price of the versions used in the XO.

Quoting:There's no benefit of scale yet (until the XO goes into full production, which will drive the cost of later XO's down) and most parts do not have newer versions that drive down the price of the versions used in the XO.

Sorry, there is scale. 5 or 6 countries already committed to purchase 1 million each. Some of them already paid it, ex: Libya. The manufacturer wouldn't start production until there are commitments and they got them.

Abe: But have the parts for those committed puchased all been produced, shipped and payed for? It's only after that when the benefit or large production runs start working. Once the part manufacturer has recouped a large swath of his initial investment and startup cost, and when new prices are negotiated for subsequent runs.

Sander,

We don't have all the facts, on the other hand, like I said before, the price keeps going up and multiple times while everything else keeps going down. That doesn't make sense to me and something isn't right.

If it was mis-estimation and didn't figure in cost of material, inflation, etc. then someone did a real lousy job.

In my opinion, if they can't come out with good explanation, something else is going on.

If I were responsible for any of the countries that already committed, I would demand an explanation.

I don't know. Like I explained, the increase in price isn't shocking for me. What I am far more interested in is if and how the hardware has changed. It's far easier to prove your MS theory by looking at the hardware than it is by looking at the price.

Perhaps Microsoft would do well to get involved in either the OLPC or its own MS-centric version of something similar.

Individual countries within the European Union could currently be much more amenable to considering an Open Source laptop venture such as OLPC, now that Microsoft has lost its appeal of the €497 million ($690 million) fine imposed on the company in the European Court of First Instance (see http://lxer.com/module/newswire/view/92816/index.html) Also, individual countries in the BRIC group -- Brazil, Russia, India, and China -- are in the very unique position of not only having more and more monetary/investment clout, but also clout related to strong political connections with poorer Third World-type countries.

Microsoft must surely be aware of all this, not only by allowing pirated copies of Windows and Office software to proliferate, but also by trying to gain further inroads for OLPC and its own MS-centric takeoff(s) within the EU and these BRIC-allied countries.

How about M$ really out to buy up some of those $200 laptops, throw a Windows CE -like OS -and- a scaled down MS-Office on these that they can upgrade in the future, and then sell these back at a steep discount to the sponsoring countries?

You mean $400 laptops, right? If they are sold in the west, then they are sold for double price to sponsor the laptops for the 3rd world. So if MS buys 100.000 machines to flash with Windows-CE they will have sponsored an extra 100.000 XO's with Linux shipped to the 3rd world for free :-)

And if a country bought those discounted laptops with Windows CE, they'd soon regret it - power-sucking, not children-oriented, network-disabled (they'd have to develop or "steal" the mesh networking code), etc. I don't worry about that, really...