Thursday, January 10, 2008

Intel Pulls Out of Charity Founded to Distribute Computers to Children Around the World

Widely reported, Intel recently withdrew its support for the One Laptop Per Child Charity ("Charity") over charges that Intel was competing with the Charity in foreign countries where the nonprofit had contracts (or potential contracts) to distribute its low-cost ($100 US) laptop.  (see NY Times Article and UK Article (1)).  The articles report that the partnership between Intel and the Charity dissolved over multiple concerns voiced by the Charity that Intel salespeople openly competed for sales with the Charity.  The incident that ultimately triggered Intel's withdrawal involved a salesperson who allegedly tried to persuade a Peruvian government official to breach its deal with the Charity to buy the Charity's low-cost laptops in favor of buying Intel's competing, low-cost laptop.

Nicolas Negroponte, a computer scientist and formerly an MIT professor, is the founder of the Charity.  The Charity was started to bring low-cost technology to poor children around the world.  (see laptop.org and Article).  Mr. Negroponte expressed concern that Intel's practices were undermining the Charity's goal of selling five million low-cost laptops across the world, including in developing countries.  (If you are interested in hearing directly from Mr. Negroponte about the controversy, click here - Founder Discusses Intel - Video Stream).

An interesting take on the controversy involves the fact that the Charity's laptop runs on the AMD microprocessor, instead of the Intel microprocessor.  One article, in particular, suggests that the Charity controversy stems from this fact.  (see Article)  AMD (Advanced Micro Devices), a smaller rival competitor, sued Intel in 2005 in the United States District Court in Delaware over perceived anti-competitive practices by Intel.  (see Article).  In addition, the European Union charged Intel with anti-competitive practices in July 2007, alleging that Intel cut its prices to drive AMD out of the market.  (see Article and Link to EU Press Release).  These charges stem from complaints made by AMD to the European Union about Intel.  Intel denying the charges filed its response to the EU on January 7.  (see Article and UK Article (2)).

amt

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