Silicon Insider: The $100 Laptop Failure

Cheap computers for kids in the developing world: what could possibly be wrong with that?

Even if you don't know it by its official name, you've no doubt read about the XO computer project: it's the program to get $100 laptop computers into the hands of Third World children, to enable them to join the digital age, get an online education and — with luck — find a path out of their current poverty and isolation.

All very laudable ambitions. And when we first read about it a few years ago, the idea sounded particularly appealing. After all, standard laptops cost 800 bucks or more at the time. Just as important, the XO promised all sorts of interesting features designed specifically for life in the developing world, including rabbit ears to pick up wireless signals, open source software to allows users —especially teachers — to modify applications to regional needs, a built-in camera, a high contrast screen for outdoor use, high impact packaging, and even a hand crank for use without electrical power.

Since the original announcement, other companies jumped on the bandwagon, offering additional free services on the machine, including a free year's subscription to T-Mobile's Hotspot Wi-Fi service, and a free copy of SimCity installed on every machine.

From the first time I heard about it, the XO seemed like a good idea. Having spent a fair amount of time in recent years in some of the more remote corners of southern Africa, I had a pretty good sense of the general need of local folks there, especially children, for some kind of access to computers and the Web if they were ever going to break the cycle of extreme poverty in which they found themselves.

That said, even from the beginning, I had three concerns about the project.

First, and here I have to admit some real prejudice, the project was coming out of MIT. Now, don't get me wrong. MIT is a great university and produces some of our finest engineers. But I've been covering tech now for almost three decades, and through it all, I have seen one next big idea after another come out of that university, especially the MIT Media Lab, and I can't think of a single one that has ever found success in the real world.

These announcements always make entertaining reading, in a kind of Popular Science, circa 1958 way ("Atomic Cars!"), but despite all of the hype — and Nicholas Negroponte, former director and now chairman emeritus of the lab, is one of the greatest promoters of our time — they never seem to actually happen.

Second, and this was much more philosophical, I had some concerns about the underlying philosophy — noble as it was — behind the program. I have seen a lot of do-gooder projects in Africa, all done with good-hearted intentions by wealthy folks in the developed world, and nearly all have failed. Why? For a number of reasons.

A lack of understanding about the local culture, the sheer imperviousness of corrupt local governments, and expectations for a regional infrastructure that doesn't exist, are just the start.

There is also a lack of the long-term commitment that enables these projects to survive past the first rush of enthusiasm by everyone involved, a top-down strategy that doesn't build the necessary grass roots support, and most of all, a kind of unconscious attitude of charity and pity by rich westerners that is immediately detected by the uneducated, but far from ignorant, recipients.

By far, the most successful programs I've seen in Africa have been run by church missionaries, because they start from the individual soul and work their way up. And the most successful implementation of technology that I've seen in places like Zambia and Botswana, are the guys in shacks along the highway who rent time by the minute on their cheap cell phones.

And that brings me to what was my third concern about the $100 laptop project. I am a great believer in charity, and I think that the comparatively high levels of charitable contributions and non-profit volunteerism in the United States versus other nations, is one of our greatest attributes. That said, when charity competes with market capitalism, the former is almost always shown to be less efficient, less customer satisfaction-oriented and less innovative.

No doubt, when Negroponte and the XO team first looked at the laptop market in 2004 or so, the yawning gap between a standard $800 laptop and a $100 specialty machine for poor Third World kids seemed profound, and underscored the pressing need for such a low-cost machine.

What they didn't count on, apparently, was Moore's Law — the idea that tech power will double every couple of years — and this is one of those vital factors that the Media Lab seems to regularly overlook. That $800 laptop of 2004 is now selling for $300 at Wal-Mart. And if you read last week's column about declining computer usage in Japan, it looks like we are in for a protracted PC price war in which computers, as they turn into true commodities, start getting price bombed to stoke dwindling demand.

It doesn't seem unlikely to me that, by the end of this decade, we will be seeing fairly powerful laptop computers being sold for under $200 — the equivalent of razors all but given away to help sell razor blades — just to move software and wireless contracts.

That, in turn, will make laptops all but disposable products, cast off after a year or so of use, to be replaced by the newest model — meaning that ubiquitous, slightly used laptops will probably cost fifty bucks or less. And when the price gets that low, and demand collapses in the developed world, where will all of those used computers go? In containers, by the millions, to the developing world. There, they will join a billion smart cell phones that will be given away to sell wireless services.

Meanwhile, the $100 XO laptop has now drifted up in price to $188, making it not that much different from retail laptops, which don't have the compromised performance.

Sure, the cheapo retail boxes won't have some of the clever features of the XO, but if you are kid in Lusaka who wants a computer, not just for school, but gaming and selling handicrafts on eBay, which one will you buy — especially when service for the XO is still in doubt, and the other machine is a Dell?

The XO folks — officially the One Laptop per Child Foundation — are trying to overcome this new price obstacle by making it immaterial. This is being done two ways. One is to offer — in the U.S. and Canada — a 2-for-1, "Give one, get one" program: you buy two XOs for $400, and one gets donated to a worthy recipient in the developing world, and you get to keep the other and take a $200 donation credit on your taxes.

This is a clever idea, as it plays off Western guilt and sense of duty, and gets the computer to a needy child for nothing. However, other than to show off that we are noble people, I'm not sure why you and I, or any of our children would actually want an XO. Better to just pay the 400 bucks and donate both machines to help twice as many needy kids.

The other XO plan would require the countries where the laptops will be placed, to make a substantial financial commitment to the program: they have to buy a minimum of 250,000 units — $50 million worth. There is a good strategic reason for this, as it forces those governments to participate in the program and have a stake in its success — though, whether that will reduce any of the usual corruption is questionable. And it has already produced a backlash.

Some social activists question why that kind of money is spent on computers rather than more immediate concerns, like fresh water — $50 million would, for example, buy a lot of reverse osmosis pumps for villages, and could save thousands of lives.

Personally, I'm with the XO folks on this one. If places like Africa are ever going to escape the vicious cycle of poverty, it will be by joining the world economy, not — hard as it is to say — by giving complete priority to immediate health concerns. Prosperity improves the quality of life.

That said, my doubts about the XO laptop computer only grow by the day. I wish the project well.

Every computer in the hands of one more poor kid in the developing world is one more chance for those regions to escape their downward spiral and join the rest of the world. Nothing would make me happier than to see some future Nobel Prize winner in physics or chemistry credit his trusty old XO computer for changing his life.

Moreover, I know from experience that many of those people being targeted by this program are among the most talented businesspeople in the world. All they lack is capital, and if they happen to take their free XO laptop and quickly sell it on eBay to finance their own project, what's wrong with that? And, in the meantime, even as you write your check to the One Laptop per Child Foundation, pray for market capitalism to hurry up and render it obsolete.

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This work is the opinion of the columnist and in no way reflects the opinion of ABC News.