The One Laptop Per Child (OLPC) Foundation has taken another body blow. As the novelty of the initiative has worn off and other, newer and cheaper no-frills laptops have become available, donations raised from the OLPC's "Give One, Get One" programme - launched in 2007 to promote sales of the device - have dwindled alarmingly. Revenues are falling fast and half the OLPC's staff have been laid off.
The OLPC is headquartered in Cambridge, Massachussetts and the organisation's laudable aim is to provide free "basic" laptop computers to deprived children in poor countries. However, as MIT professor Nicholas Negroponte, the OLPC's founder admits, "We're no longer the newest story in town and the economic downturn has hit us, just like it's hit everybody else".
And the OLPC has certainly taken a mighty thump. Figures released late last week show that over the Christmas 2008 and New Year 2009 holiday period only 12,600 laptops were shipped and that generated a mere US$2.5 million - an astonishing 93 per cent decline on the same period in 2007/2008.
Things are now so bad at the OLPC that 32 staff have been made redundant whilst the 32 that remain in work have taken pay cuts. The OPLC's $12 million annual budget has also been slashed by more than 50 per cent. In a blog announcing the bad news, Mr. Negroponte writes, "They [the financial results] have been a real shocker. We are cutting cost and reducing our budget to run at about $5 million. But, we're going to keep going and we're going to expand."
Nicholas Negroponte also announced that the OLPC is to spin-off its Latin American operations and is to abandon any further work on developing the operating system software for the OLPC computers. Instead, he says, the Foundation will concentrate on the distribution of the devices to in sub-Saharan Africa, the Middle East, Afghanistan and north-western Pakistan. Remaining resources will be devoted to the creation of a second-generation of inexpensive laptops.
Analyst and insiders were quick to critique Negroponte's revised plans. For example, Ivan Krstic, a former director of software security at the Foundation says that as so many new laptops, while not as robust or energy efficient as the OLPC machines, are considerably cheaper, any emphasis on the development of a new generation would be futile and put the organisation in direct competition with the likes of Acer, Dell, HP and many other multinational behemoths. "At this point it's completely the wrong thing to focus on", he says.
Another ex-OLPC staffer, Walter Bender, who used to be in charge of software development at the Foundation, concurs.
He says, "A new machine shouldn't be the focus of the OLPC any more. Hardware development should be left to the major computer manufacturers and the OLPC should concentrate on high-quality educational software."
The apparent collapse of income from the "Give One Get One" programme is causing the most concern for the future of the initiative. The idea, introduced in time for the 2007/2008 Christmas and New Year holiday period, was designed to encourage US citizens to buy two OLPC laptops - one of which would be for their own family whilst the other would be for a child in a deprived part of the world. But, as the credit crunch has bitten ever-harder, Americans have stopped buying and the scheme is big trouble.
When it launched, the "GIve One Get One" programme had a minimal marketing budget and was poorly advertised. Furthermore, it suffered a severe embarrassment when distribution problems resulted in customers having to wait several months for delivery of devices they had already paid for.
However in 2008 various companies stepped into the breach and donated some $15 millions worth of free advertIsing across all media - TV, radio, print, web and billboard, whilst Amazon volunteered to take charge of the OLPC's troubled distribution processes. As a result, the initiative shipped 185,000 lap tops and generated some $37 million in renvenues.
But even so, it's not enough. The intent was to manufacture and ship millions of the distinctive green and while computers but, to date, only 585,000 have been distributed - although a further 195,000 are in warehouses awaiting shipment.
The other main reason for the disappointing uptake of the OLPC device is that only a handful of government have carried through their commitments to buy the machines and get them to where they are needed. Many nations have reneged on what the OLPC regarded as copper-bottomed promises to purchase large numbers of the laptops with only Colombia, Peru and Ghana taking them in large quantities.
That's why some analysts are gloomy about the OLPC's prospects. For example, Roger Kay, of the Endpoint Technologies Association says, "The OLPC doesn't really have a business orientation. From the start they did not position themselves as a going concern. I would be surprised if they actually survive the recession."
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