Retail

Retail Model

This is an outline of where the Retail Sales Model fits into the whole concept of a $100 laptop.

OLPC's Role

Within this model, the OLPC's role is primarily to design and deliver a working prototype of the $100 laptop. This involves a lot of innovative technical work because these devices will have many features that current laptops do not have.

The secondary role of OLPC is to broker agreements with various national governments and manufacturers. This brokerage role includes the same elements as normal product development, but stops short of developing a sales channel. Instead, the OLPC focuses on marketing the potential of a $100 laptop and on bootstrapping national groups in various countries. These national groups are either within national ministries of education or closely aligned with them and they make the final decisions on software, content and distribution methods. Because the distribution role falls outside of the OLPC, there is no retail sales channel.

Government Role

Government support of an OLPC rollout is essential. The money to buy the $100 laptops comes from various countries' national budgets and the rollout is coordinated with their ministries of education. The OLPC provides information, assistance and a framework, but does not make any decisions regarding distribution. This decisionmaking is all done by the national government or is delegated within the country in question.

Commercial Manufacturers

OLPC negotiates with Commercial Manufacturers in the same way that any other device manufacturer would do. Both parties work closely to design, build and test prototypes, make component sourcing decisions and cost out production at various scales. The OLPC in this relationship is the intellectual property holder and follows a familiar product development process with the manufacturers.

Retail Sales on the Open Market

This part of the model is currently not clearly defined. Firstly, it is not something that OLPC itself will do either now or in the future. However, there will be retail sales of 2B1 or similar models. This will happen sometime after the initial country rollouts when the manufacturers are comfortable enough with production on a large scale. At that point, there will be a process for retail sales channels to licence the design and contract for it to be manufactured targeted directly at the retail market. Given the expectation of volume shipments of educational units in the summer of 2007, it is unlikely for retail sales to begin before 2008.

Initially, this is likely to be for units virtually identical to 2B1 targetted solely at the educational market in North America and Western Europe. But the design will be available for licensing to companies who want to produce a device for the open market. Before this will happen, the OLPC will review their licencing terms to determine what special restrictions may need to be placed on open sale of these laptops. This is done in order to protect the educational deployments which are, and will remain, the primary focus of the OLPC.

Any restrictions will be designed to limit the possibility of educational units being diverted to the open market. This likely means that the case styles will be different and that units may have some enhanced capabilities such as built-in Ethernet, extra flash RAM or it may be required that they are bundled with one or more accessories.

Grey Market Sales

At some point, it is expected that attempts will be made to create a grey market in diverted or stolen 2B1's. OLPC will make every effort to discourage this particularly since such units will almost certainly be stolen property. Don't expect to buy a 2B1 on Ebay before the retail units come to market.

Pledgebank

Someone started a webpage that to suggest selling our laptop for $300, so the balance of money can be used to support the poorest children. However, the pledge fell far short of the required 100,000 people. Here is the message that Pledgebank sent out on Nov. 1st:

    We are sorry to have to inform you that the pledge to which you
    signed up did not meet its target in the required time.  It
    required 100000 other, but achieved only 3678.
    
    The pledge, created by Mike Liveright, read: 'I will purchase
    the $100 laptop at $300 but only if 100,000 other will too.'
    
    This means you don't have to do your part of the pledge. 

Please understand that you could not pre-order a Laptop there, you could only indicate interest.

Does this mean there isn't sufficient retail interest?

No. The Pledgebank survey was entirely self-selected and it was done on a site that is oriented towards charitable good works, not market research. Until someone does some real market research, it is too early to tell how much of a retail market there is. However, the OLPC project has a very high public profile globally which would help any retail marketing campaign. The fact that the 2B1 includes so much innovative hardware and software research indicates that it is not a mainstream laptop and therefore does not compete head-on against commercial laptops.

Anyone doing market research would have to investigate the niche between PDAs and laptops. The PDA market has shrunk recently as PDA users shifted to either mobile phones or laptops depending on their needs. Lower laptop prices played a role in this. The 2B1 has the low price advantage even when you look at expected retail price points of $300-$450. Yet it incorporates more PDA-like features without the disadvantages of the PDA's small screen and incompatible OS.

Vendors

OLPC has stated that it is talking to many of the well-known computer vendors about a retail version of the Laptop. Please do not expect an announcement before the middle of 2007, when full production is scheduled to start.

"The bottom line is that our mission is learning, not laptops. While we will be working with a commercial partner at some point for both machines and interesting parts--we've been looking at models where by the commercial side can help drive down the cost for the kids--our immediate priority is the non-commercial machine." --Walter (copied from Ask OLPC a Question)