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February 15, 2007

1 million $130 laptops on the way

Quanta confirmed order for ultra low-cost laptops

Dan Nystedt

Quanta Computer, the world's largest contract laptop PC manufacturer, has confirmed orders for one million notebook PCs for the One Laptop Per Child (OLPC) project.

The OLPC project is aimed at ensuring children around the world don't miss out on learning how to use computers. The fear is that the high cost of computers is keeping too many people in developing countries from learning how the software, internet and communications benefits of computing can improve their economies, job prospects and lives, a conundrum commonly referred to as the digital divide.

Quanta is manufacturing the OLPC laptop, and mass production is the key to slashing its cost. Currently, the laptops cost around $130, but the goal is to whittle down the price to $100. The groups involved in the OLPC project, including the MIT Media Laboratory that launched the effort, chip maker AMD, and Linux software developer Red Hat, believe they can reach that goal once millions of the laptops are being produced annually, and had set a target to reach that price sometime in 2008.

Quanta said it could ship between 5 million to 10 million units this year because seven nations have already signed up for the project. That may be enough to reduce the costs and meet the $100 goal sooner than expected.

The governments that have committed to buy laptops for their schoolchildren include Argentina, Brazil, Libya, Nigeria, Rwanda, Thailand and Uruguay.

Quanta expects to make a small profit on each machine.

"OLPC is a non-profit organisation, but Quanta is a contract manufacturer, a for-profit business. We can't not charge a fee for making the laptops," the representative said.

What the company is doing is helping find ways to cut costs as much as possible. The company became famous by slashing production costs to a bare minimum and figuring out ways to further reduce the cost of laptops themselves.

Apple, Dell and HP are just some of the companies that farm out notebook PC orders to Quanta, which manufactures the products at factories in Taiwan and China.

The company is using its expertise to keep OLPC laptop production costs to a minimum.

"This is our chairman's pet project, it's his life," said the president of Quanta, Michael Wang, at a company Lunar New Year celebration last week.

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