Sunday, February 1, 2009

Computer and Competition: From $100 laptop to $10 laptop

First, Nicholas Negroponte started the OLPC program that made headlines around the globe. It was initially projected to cost around $100 but costs now shoot up to $200. Then, Intel came up with its own low-cost computer “Classmate” seeing a large untapped market in the developing countries. Then came other low cost laptops in the range of $200-400. Competition is brewing up pretty fast. ‘Self-discovery’ (information externality) is in action!

Now, Indian investors and the government are all geared up to introduce a laptop for $10 for education purposes. The government is subsiding $10 on each laptop. If this project kicks in real good in the beginning, then the OLPC project, which is already facing stiff competition and deficient demand, might be…

The $10 laptop will be equipped with 2 GB of memory, WiFi, fixed Ethernet, expandable memory, and consume just 2 watts of power.

The unveiling of the laptop will occur at the government's launch of the National Mission on Education through Information and Technology, held next Tuesday in Tirupati. The Indian government is working with publishers to provide e-content on educational subjects which will be available free of cost. The government is also considering a plan to subsidize internet connections for schools.

Currently, the government is consulting with different production agencies, and hopes to make the computers commercially available in the next six months.

Fyi, here is one-egg-per-child (OEPC) in Uganda!

Update: Oops! This seems to cost $100, not $10:

Early reports of the cheap laptop suggested that it would cost only 500 rupees (£7). However, this could be a mistranslation, because transcripts of the speech, in which it was unveiled, mentioned it costing $10 (£7) but this was later corrected to $100 (£70).

Even if the finished device costs $100, it will significantly undercut other low cost laptops aimed at the developing world, such as the One Laptop Per Child's XO machine and the Intel Classmate.

Originally, the XO was intended to cost $100 but the finished version ended up costing about $188 (£131).