U.S. News

Non-profit group to ship low-cost laptops in October

NEW YORK (Reuters) - A U.S. nonprofit group expects to start delivering millions of low-cost laptops to poor children around the world in October, a move that could prompt microchip maker Intel Corp. to follow suit.

The One Laptop Per Child Foundation’s effort is the most ambitious attempt to equip poor children in developing countries with computers, and one that analysts say could shape PC industry growth in developing markets.

Intel has been distributing laptops to children in developing countries for years, but it has yet to put them into the kind of mass production planned by the OLPC foundation.

The project’s founder, MIT researcher Nicholas Negroponte, said in an e-mail interview that the foundation will start ordering components in bulk for the devices within the next month, so that production on an initial batch of 3 million machines can begin in September.

The green-and-white, kid-friendly laptops that can be powered with hand cranks when electricity is not available will cost $176 apiece.

“It is all breaking news, with many things converging in the next 30 days: hardware, software and country agreements,” Negroponte said in the e-mail.

He is trying to sell the devices in some 30 countries, including Brazil, Colombia, Libya, Mexico, Russia, South Africa and the United States. He declined to say where he expected the orders to come from before they are finalized.

Intel, the world’s largest chip maker, typically fills orders for hundred of units to several thousand, while OLPC seeks them in the hundreds of thousands.

Intel Vice President John Davies said in an interview that his company has no immediate plan to crank up production. But he said that could change if Negroponte’s effort shows strong demand for such devices.

“It’s going to be driven by the market -- at the rate at which the market can afford and wants to absorb it,” said Intel Vice President John Davies. “We can speed this program up -- probably faster than the market can absorb it.”

A Classmate PC designed by Intel costs $285 now but that could be cut to about $200 if production were ramped up, he said.

The OLPC foundation’s PC, dubbed the XO Laptop, runs on a microprocessor from Intel-rival Advanced Micro Devices Inc.. Red Hat Inc. helped designed its software.

Other backers include Citigroup Inc., eBay Inc., Google Inc., Marvell Technology Group Ltd., News Corp. and Nortel Networks Corp..

Mexican entrepreneur Carlos Slim, the world’s third-richest man, has recently agreed to support the project in Latin America, Negroponte said.

While the XO was designed to run on Linux software, Microsoft Corp. is developing Windows drivers to enable its operating system to work on the laptop.

Negroponte said in the interview the foundation is “open to” running Apple Inc.’s OS X Macintosh operating system on the XO laptop. An Apple spokesperson declined comment on its plans for the device.