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Intel leaves the OLPC after dispute

According to Intel, the OLPC not only asked Intel to stop working on its own low-cost laptop projects that competed with the OLPC's XO laptop, it also asked Intel to stop supplying chips to other partners, like Asus, working on similar designs.

Well, that was short: Intel has announced it is leaving the One Laptop Per Child project.

The news, first reported Thursday by The Wall Street Journal in an e-mail alert, comes just six months after Intel and OLPC founder Nick Negroponte agreed to settle their differences and join forces, united in their goal to bring computing power to emerging nations. The breakup comes after Negroponte apparently wasn't willing to share Intel with others.

Khaled Hassounah, director of the OLPC in Africa and the Middle East, demonstrates an XO laptop to a classroom of students in Nigeria. Ahmad Dan-Hamidu

According to Intel, Negroponte asked the chipmaker to stop selling its Classmate PC while it was part of the OLPC, which is currently shipping its XO laptop based on a chip from AMD. The Classmate PC was one of the sources of friction between Negroponte and Intel before they joined forces in July. Negroponte went on 60 Minutes in May and accused Intel of dumping Classmate PCs below cost in order to keep OLPCs out of the hands of needy children.

Intel and OLPC were working on an Intel-based version of the XO laptop, according to Agnes Kwan, an Intel spokeswoman, but the OLPC insisted that Intel end its production of the Classmate PC. Even more surprising, Intel is saying that the OLPC actually asked the chipmaker to stop working with any company that produces low-cost laptops, such as Asus' Eee PC.

"We have said for a long time that we don't believe there will be one single solution" for getting laptops in the hands of poor children, Kwan said. "There are some basic fundamental differences in our approaches."

It was nighttime in frigid Cambridge, Mass., home of the OLPC when the news broke. No one answered the phone at the company headquarters, and an e-mail to public relations representatives seeking comment on Intel's allegations was not immediately returned.

Intel's Classmate PC Michael Kanellos/CNET News.com

If this went down the way Intel is claiming, Negroponte's move is baffling. The OLPC project hasn't exactly been a huge success, but the goal is noble, and the "Give One, Get One" program seemed to generate some interest among tech-savvy do-gooders.

But the move sort of reminds me of NBC's Jeff Zucker, demanding a cut of iPod revenue in return for selling NBC shows through iTunes at Apple's pricing terms. Did the OLPC really think Intel would stop supplying other companies with low-cost chips simply because it asked? It would be sort of like if Dell asked Intel to stop selling HP and Apple Core 2 Duo chips, simply because Dell thought its latest XPS laptop was a more righteous product.

I'll update if I hear back from the OLPC, because it's quite possible there's much more to this story.