Friday, 4 January 2008

Acrimony as Intel exits One Laptop project

By Chris Nuttall in San Francisco

An uneasy partnership between Intel and a non-profit project providing cheap laptops for third-world children has ended acrimoniously with the world’s biggest chipmaker being accused of “shameless” behaviour.

An Intel spokesman on Thursday described the split between the company and One Laptop Per Child as being caused by a “philosophical impasse”. But OLPC responded on Friday with a 10-point list of complaints, accusing Intel of constantly criticising the project’s XO laptop and promoting instead its own Classmate laptop for developing countries.

The two sides temporarily settled their differences last July, after Intel had publicly criticised the OLPC effort and Nicholas Negroponte, OLPC’s founder, had accused Intel of selling the Classmate at below cost to drive the XO out of the market.

Intel agreed to help with development and marketing of the XO and join the OLPC board. It joined 11 other companies as partners, including its rival Advanced Micro Devices, provider of the XO’s processor.

The XO went into full production in October, costing $185 rather than the $100 initially envisaged. OLPC expects the price to fall and has sold XOs to US buyers for $400, pledging to donate one for free to a child in a developing country for each US sale.

OLPC claimed on Friday that Intel was about to be thrown out of the project, but both sides had agreed on a joint statement saying there had been a mutual agreement. Intel had reneged on this by saying it was quitting, it claimed.

The Intel spokesman said OLPC had asked it to end its support for the Classmate PC, a request it could not accommodate.

“Intel has been shameless,” OLPC said in a statement on Friday. “Intel has violated or not lived up to any part of their written agreement.”

“OLPC welcomes, always has, other low-cost laptops. Our goal is to get laptops into the hands of kids, not necessarily XOs.”

OLPC accused Intel of disparaging the XO in countries from Peru to Mongolia and said its criticisms had increased in frequency and volume after it joined the board.

It said it hoped to introduce an XO based on an Intel microprocessor but “the best Intel could offer in regard to an ‘Intel inside’ XO laptop was one that would be both more expensive and consume more electric power.”

The project alleged that Intel had not contributed any engineering effort or even a single line of code during its six months of membership.

An Intel spokesman was not immediately available for comment on the OLPC allegations.

The unfavourable publicity for Intel came on a day when the company suffered its second analyst downgrade of the week, sending its shares 6.7 per cent lower to $23.02 in midday trading in New York.

Copyright The Financial Times Limited 2008

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