Ethical Performance
inside intelligence for responsible business


Intel leaves laptop project

February 2008

One of the world’s largest information technology companies has withdrawn from an initiative to spread the use of computers in poor countries after only six months involvement in the project.

Intel has pulled out of its partnership with the non-profit One Laptop Per Child Organization (OLPC) after tensions emerged over OLPC’s philanthropic aims and the company’s commercial interests.

Intel joined OLPC in July, taking a board position on the organization, which aims to design, manufacture and distribute laptops that are inexpensive enough to be sold to developing nation governments and distributed to schools.

Intel is believed to have been unhappy that OLPC was insisting the company shelve development of its bottom-of-the-range Classmate personal computer in favour of OLPC’s own XO computer, which does not include Intel technology. According to OLPC, Intel was attempting to sell the Classmate to governments that had already made provisional commitments to the XO, violating a nondisparagement clause in its contract. Intel’s response was that the clause bound only the company’s officers, not its sales force.

Dave Stangis, Intel’s corporate responsibility director, said the split had been a ‘painful’ start to the new year. ‘We and OLPC had, and have, the same basic goal. I thought the relationship was a win-win.’

OLPC president Walter Bender has been scathing in his assessment of Intel’s actions, even though the company contributed $6million (£3m) over the period it was on board, a third of the figure initially pledged. ‘My expectation was that there was lots of room for co-operation, particularly on software... [but] I couldn’t get Intel interested in helping me with any of those problems,’ he said.

OLPC aims to give every child in the world daily access to low-cost, ‘rugged’ laptops that can be powered by a hand crank. Bender said Intel’s computer was ‘more expensive and more power-hungry’ than the XO.

OLPC has sold 600,000 of its early model computers at around $188 apiece to date, mainly to the governments of Uruguay and Peru. However India and Thailand, among others, have not yet committed, saying they have other spending priorities. OLPC had to abandon its original intention of only entering production when five million orders had been placed and this meant the XO’s cost is higher than the $100 that was hoped. Intel’s Classmate PC currently retails at around $300.

Wayne Visser, research director at the University of Cambridge Programme for Industry, said the fall-out highlighted the difficulties of voluntary and private sector partnerships with such ambitious aims. ‘Our recent research found that the main reason cross-sector partnerships fail is differences of expectation and/or commitment between partners, and this seems a classic case in point,’ he said. ‘We also found that it’s best not to partner when goals or motives are not compatible. Here, Intel seemed to have a commercial conflict of interest, while OLPC had an entirely mission-led purpose.’

Bender added that the industry’s move to a lower profit margin model which the XO began might explain why ‘we have got so much grief’, following criticism headed by Microsoft and Intel.

Intel | Global | Partnerships

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