In a statement Jan. 4, the OLPC project claimed that Intel violated written agreements with the board of directors, did not help in developing software with the project and "disparaged" the OLPC's XO laptop.

"We have always embraced and welcomed other low-cost laptop providers to join us in this mission," the OLPC statement said. "But since joining the OLPC Board of Directors in July, Intel has violated its written agreement with OLPC on numerous occasions. Intel continued to disparage the XO laptop in developing nations that had already decided to partner with OLPC (Uruguay and Peru), with countries that were in the midst of choosing a laptop solution (Brazil and Nigeria), and even small and remote places (Mongolia)."

When Intel announced Jan. 3 that it would leave the OLPC board, an Intel spokesperson told Reuters that the nonprofit organization wanted Intel to focus "exclusively on the OLPC system." Intel has its own low-cost laptop for emerging markets called the Classmate and is working on a processor, code-named Diamondville, designed for use in these types of PCs.

Now that Intel has left the OLPC project, the organization will go back to using chips from Advanced Micro Devices.

In its own statement, the OLPC even took Intel to task over the way it handled its departure from the group, claiming Intel made the announcement without consulting with the OLPC board first. The nonprofit said it was not discouraged by Intel's departure and planned to move forward.

"The benefit [of] the departure of Intel from the OLPC board is a renewed clarity in purpose and the marketplace; we will continue to focus on our mission of providing every child with an opportunity for learning," the organization said in its statement.

Roger Kay, an analyst with Endpoint Technologies Associates, said the OLPC project will continue and AMD should be able to supply it with all the microprocessors it needs. However, Intel's departure from the board is a significant blow to the nonprofit's credibility within the IT industry, he said.

"The point is that entities like the OLPC need a company like Intel on its board, and if you lose them, then who are your friends?" Kay said.

Kay also criticized the OLPC for running its operation more like an academic exercise than a business that sells laptops at a low cost. Intel, Kay said, wants to make a profit and it's unrealistic that Intel would cut its ties with other companies in order to work exclusively with the OLPC.

"You can't pretend like your suppliers are not in the business world," Kay said, adding that Intel had been a reluctant partner of the OLPC anyway.

Simon Yates, an analyst with Forrester Research, agreed that Intel and the OLPC were mismatched for this type of project.

"They had very different motivations and were never on the same page in terms of expectations," Yates wrote in an e-mail to eWEEK. "In my opinion, a successful strategy for emerging markets requires a good mix of three motivations--fear, greed and citizenship. You need to be fearful that if you don't develop a solution, someone else will step in. You need to be greedy enough to see a financial opportunity worth investing in and pursuing aggressively. You need a moral imperative to drive passion even when the revenues aren't rolling in. I don't think that Intel and OLPC resolved their fundamental differences up front and it was only a matter of time before something dramatic happened."


--Scott Ferguson