What will 2009 mean for Negroponte’s OLPC?

When the OLPC Foundation launched the program again this year I couldn’t resist but participate. What was this whole thing about? Why were people getting so excited by these little green machines and are they really any good? Does the open source software (Sugar OS) actually work? And what is this learning by doing idea all about? Can I really draw a car and then program it to drive around my computer screen?

I signed up to Amazon.com and had one shipped. When it arrived, I was surprised to find only a power plug, a one page brochure and a small green machine in the box. It was as simple as plugging it in and turning it on. No manual, no warranty, nothing to install and nothing to read. Needless to say there is something really attractive about this approach and it was no surprise my little green laptop was the toy everyone wanted to play with.

But getting back to work, I was surprised to read that the OLPC project was cutting its staff in half as a result of what Negroponte described as “tough economic times.” G1G1 2008 sales were only 7% of 2007’s, according to Nicholas Negroponte in a recent article for the Boston Globe. He goes on to say that, “During the 2008 holiday season, the program sold only about 12,500 laptops and generated a mere $2.5 million – a 93 percent decline from the year before. That was a real shocker.” As a result, the foundation is forced to slash its $12 million annual budget and, according to Negroponte’s statement, they will now be running a budget closer to $5 million.

It was the team at OLPC News who observed that the lack luster sales were partly self-inflicted. They explained in a recent newsletter, “So OLPC’s refocusing is not due to “tough economic times” faced by other nonprofits, as Negroponte led us to believe in his email. The half-staff sack is directly related to competitive pressures brought on by OLPC’s success in G1G1 2007. When a nonprofit can sell 185,000 laptops, generating $37 million in revenue in only six weeks, commercial laptop manufactures get their own game on. Now a plethora of 4P Computers from Asus, Acer, and others are crowding into the “netbook” category that OLPC started with the XO.”

Looking up the numbers I wasn’t surprised to read that in contrast to the OLPC’s lackluster sales, netbooks were actually the most popular computer category on Amazon.com over the holiday period. Bob O’Donnell, vice president of clients and displays at IDC, estimates 11.6 million netbooks will be sold in 2008, rising to 21.5 million in 2009 and reaching 42 million in 2012. Obviously Negroponte has tapped into a serious market demand for simple laptops. At the same time his project struggles and many in the blogosphere are asking if this is the end of the program as we know it.

Either way, I am curious to see what steps and strategies the OLPC Foundation will now employ in the effort to push the project forward. It is clear the team will need to make some smart choices as they face what might be the most critical period in the projects history. It is possible that in the fight to stay alive they could jeopradize the integrity of the entire project.

See the e-mail sent January 7th, 2009.

Like many other nonprofits that are facing tough economic times, One Laptop per Child must downsize in order to keep costs in line with fewer financial resources. Today we are reducing our team by approximately 50% and there will be salary reductions for the remaining 32 people. While we are saddened by this development, we remain firmly committed to our mission of getting laptops to children in developing countries. We thank team members who are departing for their contributions to this important mission.

This restructuring is also the result of an exciting new direction for OLPC. Our technology initiatives will focus on:

• Development of Generation 2.0
• A no-cost connectivity program
• A million digital books
• Passing on the development of the Sugar Operating System to the community.

With regard to deployments:

• Latin America will be spun off into a separate support unit
• Sub-Saharan Africa will become a major learning hub
• The Middle East, Afghanistan and Northwestern Pakistan will become a major focus

Separately, OLPC will be dedicated to bringing the cost of the laptop down to Zero for the Least Developed Countries – the $0 Laptop.

Restructuring brings with it great pain for some of our friends and colleagues who are being let go. These individuals are people who have dedicated themselves to the advancement of a noble cause, and to say that we are exceeding grateful for the time, the ideas, the energy and the commitment they have given OLPC does not — cannot — adequately express our admiration or our gratitude. The fact that there are 500,000 children around the world who have laptops is testament to their extraordinary work and is already a key part of OLPC’s legacy.

The future brings with it some uncertainty, some difficulty, but also the excitement that comes with the rededication to a cause, and a new path that will allow us to realize the moral purpose of OLPC. I hope that each one of you will remain supportive of OLPC, and its mission of opening up a universe of knowledge to the world’s poorest children living in the most remote parts of the Earth.

— Nicholas Negroponte