The One Laptop per Child (in Gold)
11 November 2007
*I have been enjoying a visit of a family member and so have been off computers for a few days. This post was written last Thursday. *
Mass production of the One Laptop Per Child XO Machine has begun according the the Beeb, congratulations to everyone involved with the project.
When the project began in 2005, it was called the $100 laptop, now the price is $188 and some technical journalists criticise it for the price. I think this criticism is somewhat short sighted.
Firstly, the price doesn't matter as much as the fact that the OLPC is the first laptop ever designed solely for the educational needs of a developing world primary school child.
Secondly, it is not American consumers buying the laptop, it is developing world governments, in say Uruguay or Mongolia, the price in dollars is not relevant. In China where the laptop is made, the price in dollars is not relevant. The price has not gone up for anyone but rich Americans who don't need the OLPC anyway.
George W. Bush has pissed away the economic gains made under Bill Clinton and it is leading to a readjustment in the world economy, and so the living standard of the average American is falling when measured against everyone else. A dollar today is worth far far less than it was worth in 2005.
Gold, Gold - Always believe in your soul (Spandau Ballet, 1993)
Let's have a look at the real global currency - gold. In the last two years, the world supply of gold is broadly the same, gold is gold. On the 7th February 2005, an ounce of gold would cost you $413. At close of trade yesterday, 7 November 2007, the same ounce of gold cost you $845.
So in 2005, $100 was worth 0.24 of an ounce of gold. So lets call it the 0.24 of an ounce laptop. Today 0.24 onces of gold is worth $203. So the launch price of the OLPC (0.22 ounces) is actually cheaper now than $100 at 2005 prices. It is actually a dime and a couple of cents less than $92. So the OLPC actually costs less than $92 dollars in 2005 prices as measured by gold.
Lastly, never bet against Moore's law (the power of hardware improves exponentially). One of the biggest costs in the OLPC machine is RAM, and the price of RAM is now starting to collapse. Not least because manufacturers expanded production for the expected extra wave of hardware upgrades last Christmas for Windows Vista, a wave that never came. As the price of RAM falls, and the OLPC project accrue economies of scale as they ramp up production, expect the gold price of the laptop to fall even more.
1 andylockran says...
I for one have noticed the drop in RAM.. I bought a 1GB stick for my desktop at this point last year for ~£80... the same stick now would set me back a whopping ~£18. If only I could have waited a year... :)
Posted at 10 p.m. on November 11, 2007
2 Tshepang says...
Very interesting analogy you make there and a nice defence against those complaining about the price of the laptop. One wonders why they complain anyways, considering that the price only covers the cost.
Posted at 3:47 p.m. on November 13, 2007