OLPC and Intel bury the hatchet--for the children

Negroponte's One Laptop Per Child project is bringing Intel on board as a partner and a possible future supplier, the two entities announced Friday morning. Intel will become the 11th member of the OLPC's board, joining other companies such as Google, eBay, Nortel and Intel's bitter rival Advanced Micro Devices.

The OLPC's mission is to put laptop computers in the hands of children around the world, in the hope that access to technology will help improve the education of millions growing up in nations concerned with weightier issues than Facebook versus MySpace. The XO laptop at the heart of the project costs about $175 to produce, but Negroponte, founder of the nonprofit OLPC, thinks they will sell for about $100 once production starts in earnest later this year.

Just a few weeks ago, the notion of Intel and Negroponte working together would have seemed absurd. Negroponte's almost evangelical approach to the OLPC project and Intel's determination to grab a piece of the emerging PC market has produced rancor on both sides over the past few years.

Intel Chairman Craig Barrett has been the public face of the company's work on its Classmate PCs for emerging nations, and he has been very dismissive of the OLPC project in the past, calling it "the $100 gadget." And in a May interview with 60 Minutes, Negroponte accused Intel of dumping Classmate PCs way below cost in order to win deals with local governments and sabotage Negroponte's dreams of bringing PCs to the world's poor children.

The dispute appeared petty at times, beneath both the world's largest chipmaker and the co-founder of the Media Laboratory at the Massachusetts Institute of Technology. After all, there's unfortunately no shortage of poor children in the world who have yet to realize the power of the personal computer, and the developed world is big enough to support a huge PC industry with dozens of rich players.

After some discussion, the two groups realized they had more in common than they had in dispute, said Will Swope, a corporate vice president and general manager of corporate affairs at Intel. "We're trying to accomplish the same thing," he said.

Intel's immediate effect on the OLPC project will be to improve the open-source software that ships with the XO laptop, said Walter Bender, president of software and content for the OLPC. "Intel has got a very strong team in Linux and open source," he said.

Intel is currently wooing developing nations with Classmate PCs that are available with either Linux and Windows, part of the chipmaker's continual dance between Microsoft--its closest partner--and the desire of some customers for open-source software. But the OLPC is an avowed open-source supporter, giving Intel a broader outlet for the work produced by its collection of open-source software engineers.

At some point, Intel also wants its chips to be inside the XO laptop, Swope said. "We are going to try to win the XO business, but it's the OLPC's decision. We haven't won the business as a result of this agreement."

Teaming with a rival
At the moment, AMD is the silicon supplier for the XO laptop. This appeared to be at least part of the reason behind Intel's disdain for the OLPC project as well as Negroponte's suspicions that Intel wanted to lock him out of certain countries. In the developed world, the PC market is rapidly maturing; eroding the growth rates that Wall Street loves so much. As a result, both Intel and AMD see a huge source of future earnings in the millions of people who have yet to buy a PC. The companies would rather attribute their efforts to a humanitarian desire to help the world, but shareholders like profits, too.

AMD said it was undeterred by the news that its rival was joining forces with the OLPC, despite the prospect of a few awkward board meetings at some point in the future. "Right now, we see no change in the way AMD will participate with OLPC," said Rebecca Gonzales, AMD's senior manager of business development for high-growth markets. "We welcome (Intel) to the table."

AMD and Intel do work together on several projects, participating on standards boards such as PCI-SIG and The Green Grid. But when Negroponte's comments aired in May, AMD quickly seized upon his statements as evidence that Intel was using its market heft to try and keep AMD out of the developing world--allegations similar to those made by its antitrust suit filed against Intel in 2005.

On Friday, there was only talk of collaboration. "We obviously haven't worked out all the details this is going to mean when we sit down at the table together in the board meeting," Gonzales said. "But we are going to work together to continue best practices."

Intel will continue to sell its Classmate PC--the object of Negroponte's previous ire--as a low-cost PC alternative, Swope said. "Three years from now, there's going to be any number of companies that have products that solve opportunities in the education environment," he said.

Bender agreed, noting that the OLPC hasn't locked itself into any one partner's technology. "We're looking as broadly as possible, these solutions don't exist just within one company or one architecture," he said.