Intel's bridge for the digital divide
There won't be any special chips for emerging markets, but the chipmaker does have some PC designs to pitch. Photos: Low Cost PCs
That's why the Classmate PC--a sub-$400 notebook that Intel is developing for kindergarteners through high school students in emerging nations--will come with about 1GB of flash memory instead of a hard drive so it can withstand accidents better.
As a threat deterrent, the notebook will come with asset-control software, so if it is out of the classroom for too many days, the notebook disables itself.
The Classmate will also sport a special version of Windows that prevents kids from accessing Internet sites or adding programs that have been designated by parents or teachers as off-limits.
The computer has software that can be used during classroom exercises. If a child tries to surf away from the lesson at hand, a message pops up saying, "Please pay attention to the professor."
The Classmate comes with a pink imitation-leather cover similar to the one Paul Otellini showed off in May. The notebook is part of a first wave of PCs that the Santa Clara, Calif.-based chipmaker hopes will help it establish the personal computer as the tool for bridging the digital divide.
Several individuals and organizations--MIT's Nicholas Negroponte, Microsoft, thin-client manufacturers, phone makers--are touting machines for bringing the Internet to Africa, rural Asia and Latin America. By various estimates, more than a billion PCs will be connected to the Internet by 2010.
That still leaves more than 5.5 billion people out, and they won't have much money. Bill Siu, general manager of Intel's Channel group, says that of the 800 million people worldwide who make more than $25,000 a year, 70 percent have access to a computer. Of the 4.7 billion people who make between $1,000 and $25,000, only 10 percent have access to a computer. The 1 billion who make less than $1,000 have virtually no access.
PCs are the best tools for reaching this market, Siu argues, because the world's software and communication tools are already written for them. Devices like the Simputer or Negroponte's $100 laptop are more isolated, he said.
"You need to transmit documents to other devices," he said. "So far, none of the (inexpensive alternative) devices have been particularly successful. One hundred dollars is pretty expensive for something that doesn't do the job."
Personal computers, however, are expensive, so Intel is taking a stock-car approach to design and stripping out the extras. The Affordable PC, another Intel-designed PC for this market, is a desktop that cannot be upgraded. It comes with 128MB or 256MB of memory, a 40GB drive, optical drive and two USB slots. Memory can't be added and some of the other options on typical western PCs are gone.
"PCI slots take up board space, which costs money, and then you need a bigger power supply," said Agatstein. "If you absolutely don't need it, take it out."
The machine comes with either Linux or Windows and ranges in price, with monitor, from $220 to $300. "Most of (the price variation) depends on the taxes in your country," he added.
Despite the emphasis on price, the box comes with a mobile Celeron chip. Using a low-powered notebook chip allows the PC maker to reduce the size of the computer. Low-powered mobile parts are also matched to oversized desktop heatsinks in other emerging-market PCs, so the machines can survive better when the outside temperature stays above 45 Celsius (113 Fahrenheit).
These PCs will be sold in conjunction with pay-as-you-go and credit programs to make it easier for poor people to buy them. For PCs set up in kiosks in villages, individuals will sell computer access time to their neighbors and pay off the computer over time. Governments in approximately 60 countries have created about 170 programs for people to buy PCs with credit.
One thing these new PCs will not have, however, is a special processor. A few years ago, Intel was contemplating creating a processor for emerging markets. It even kicked off some trials in Vietnam, according to sources.
The volumes, though, aren't large enough yet, said Siu. "You don't get the economy of scale with niche silicon," he said. "We're not focusing on a new piece of silicon for emerging markets."
The company may reconsider if the volumes reach the 50 million to 100 million range, he added.
Intel does not make these PCs. Instead, it designs them and gives free blueprints to manufacturers and the independent dealers who make up the channel.
"The channels are typically much stronger in emerging markets," Siu said. "The infrastructure is not there to call a 1-800 number and have a PC shipped by FedEx to your door."