[Olpc-open] Why is G1G1 program ending?

[Edward Cherlin]

On Dec 28, 2007 1:57 PM, Seth Woodworth <seth at isforinsects.com> wrote:
> Comments in line:
>
>
> On Dec 28, 2007 12:04 PM, Steve Holton <sph0lt0n at gmail.com> wrote:
> > I must strongly recommend against ending the G1G1 program. Or at least
> replace it with some mechanism for maintaining white market availability of
> growth systems and spares.

Agreed.

> I don't think that at the current pace (long lead times) and trying to catch
> up on Distribution countries orders, that G1G1 has any chance of continuing
> at the current time.  As someone suggested earlier, if G1G1 is going to
> happen again, or machines are going to become available at another time,
> OLPC should let this be known now.

Questions must be asked before drawing conclusions.

"It is a capital mistake to theorize before one has data. Insensibly
one begins to twist facts to suit theories, instead of theories to
suit facts."--Sherlock Holmes, in A Scandal in Bohemia, by Sir Arthur
Conan Doyle

The first question is what Quanta is doing about increasing
production. I assume that the factory is capable of producing more,
since the original plan was to make a hundred million or more in 2008.
I hear that current production is 15,000 a day, which would come to
300,000 a month (five days a week) or 450,000/mo (seven days/wk). OLPC
says it has orders for about half a million units. (Not necessarily
signed contracts, but let that pass for now.)

Nobody knows whether next month's orders will be more or less. For
example: The bidding process in Brazil was poorly organized, and went
badly. Bidders were not informed of the decision to waive import
duties. They may have to try again. An order in January is not out of
the question, but is in grave doubt.

* Is Quanta running 24/7 (weekends, three shifts)?
* Can Quanta open another production line in the same facility?
* What limits production? Plastic? (Would another set of dies and
injection-molding equipment be needed?) Electronics? Space in the
factory?
* At what point (credible projections of volume over time) can Quanta
commit to opening another factory? What is the lead time?

For comparison, Nintendo has been behind in fulfilling orders for its
Wii game console for more than a year. No retailer can keep it in
stock. Presumably the factory is maxed out, but building another
wasn't cost-justified. (If anyone has facts on this topic, it would
probably be helpful to share them with us.) Does anybody claim that
Nintendo is therefore a failure? That this will allow Sony (LOL) or
Microsoft to crush them?

> I am working with three different non-profits in the US who would like to do
> small scale classroom size implementations via G1G1.  But they can't get
> funding together or the projects in place in time (November > December).
> That isn't realistic for NP's in the US.

How many do they want? They will be able to order XO's in lots of a
hundred or more, cheaper than G1G1. I have been looking into setting
up an online XO supply operation. If I can aggregate orders for a
thousand, we are off. Even for a few hundred, we can discuss it.

> Implementations like this are really what we should be focusing on the in
> US.  They are in a valuable position to provide implementation feedback and
> grassroots cheer leading domestically.

I'm using the neophile Early Adopters as sources for documentation
issues. See http://wiki.laptop.org/go/OLPC_Publications and
http://wiki.laptop.org/go/New_Users.

> > The availability of hardware is the one of the last chokepoints which
> would allow an adversary to kill-off the OLPC mission and North American
> success. (The other is mission creep: changing the OLPC mission from one of
> developing an educational platform into one of competing in the North
> American laptop computer market.) And the adversaries know this.

I don't think that this is correct. OLPC has more orders than the
Intel Classmate. The environment is challenging, but there are market
forces at work more powerful than any corporation. I don't have space
or time in this e-mail to give you my whole analysis, but I intend to
write it up elsewhere.

> > The market price point is proven.
> > The community is proven.
> > The infrastructure problems (a huge hurdle) for distribution channel,
> customer service, support, etc. have been largely worked through. (quite to
> my own disbelief)
>
> With no small amount of help from you Steve.  Which should be noted.
>
> The price point isn't too bad.

Wholesale
100 @ $299 (Give a half, get one)
1,000 @ $250 (Give about a quarter, get one)
10,000 @ $200 (Give about 5% of one, get one)

plus e-commerce markup...Yes. It will work.

Anybody want to join in? Anybody with money to invest? I'm putting
some of my savings into this.

> And it is providing machines for other
> nations at a very fast pace.  Perhaps if an external company were to retail
> the machines at a similar price point it might take the strain off of OLPC.
> This company would want a margin of their own of course, which would take
> away from children too.  But such is the cost of a well oiled machine.
>
>
> > The next chokepoint would be to drain the market of hardware through:
> > - natural attrition of hardware failures.
> > - tying-up the manufacturing facilities by offering lucrative contracts to
> Quanta to build something else.
> > - market removal (buying-up systems offered on eBay, offering a trade-in
> allowance, etc).
> >
> > As long as OLPC can maintain the availability of spare parts and new
> systems for growth, both the XONA (XO North America, using the XO as a
> laptop computer) and the XOEE (XO Educational Endeavor) will grow.
> >
> > This could be accomplished:
> > - short term:  make a committment to the availability of new systems and
> spares (price point is unimportant, enthusiasts being what they are) through
> an 'Official OLPC program'.
> > - long term: multi-source hardware availability.
>
> Agreed.  I want an extra screen to hack anyway.
>
> >
> >
> >
> > However, the hard part of building the infrastructure to ship 1 system to
> 1,000,000 different people has largely been built. Sunk cost at this point.

Yes, we can offer to take over the existing operation.

> Logical fallacy.  Just because you've sunk a bunch of money into something,
> if it sucks you should still go with what works better.
>
> The structures are getting better.  But they aren't satisfying "Gimme
> Cheap/free laptop now that works k thxs by" users.  Not that we're trying to
> serve them, but *they* think that we are, and they are restless because of
> it.
> >
> > > 3.) They need to stop G1G1 in the US and Canada so they can start to
> scale up for Europe and Asia G1G1 sales.
> >
> >
> > Europe and Asia deserve a chance to G1G1, too. (A mistake, IMHO, to try to
> exclude them from G1G1, but there may have been logistical considerations I
> don't understand) But if making them available in Europe comes at the cost
> of availability in North America, I'm going to be arranging to purchase my
> spares through GreyMarketEurope.
>
> Many logisitical considerations.  Many many as I understand.  They *should*
> be overcome sooner than later.  And I think that OLPC has dropped the ball
> and explaining that fact to it's users.

Yeah, their PR is pretty feeble. They are top-heavy with geeks, of course. ^_^

> Seth

-- 
Edward Cherlin
Earth Treasury: End Poverty at a Profit
http://www.EarthTreasury.org/
"The best way to predict the future is to invent it."--Alan Kay