Who Will Win The Intel Classmate PC Vs. One Laptop Per Child Battle?

That's the question some are asking in the wake of long running public spat between Intel and the OLPC group over the hearts and minds of future PC and notebook buyers in developing countries.

Intel was slated to introduce an Intel chip version of the OLPC at the Consumer Electronics Show (CES) next week but decided not to after OLPC founder Nicholas Negroponte allegedly demanded that Intel stop selling its Classmate PC, a misnomer given that the system is actually a notebook.

Tyler Dikman, the CEO of Cooltronics, a Tampa, Fla. solution provider, said he sees the dispute as a battle for future brand loyalty between Intel and AMD.

"There's a lot of future money at stake," said Dikman. "They are both thinking about brand loyalty. If you can build a good quality entry level product at a good cost then maybe users will stick with that brand because it's a brand they know and trust."

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The stakes may be higher for AMD, which is backing the OLPC effort, than for Intel, said Dikman, given Intel's dominant market share.

Furthermore, Dikman said the OLPC may be doing itself a disservice by calling its model a laptop rather than an educational tool given the limited functionality of the OLPC product. "By branding it as a laptop they are setting an expectation that it can do everything a desktop PC can do," he said.

As for low priced laptops, Dikman says he cautions his customers against buying any such products. The lowest priced system he will sell is a $450 Dell notebook. But he warns users that a $450 laptop is likely to be replaced two or three times compared with a $1,200 laptop. "With the money you end up spending on service and parts upgrading the system over the course of a year, you're already at $1,200," he said.

So how do the two products stack up against one another? One big difference is the OLPC was designed to run on a Linux operating system, while the Classmate PC was initially designed to run Windows.

An OLPC product from Taiwan's Quanta Computer costs about $188, runs on free Linux software and is designed to be a learning tool. It offers a child-friendly user interface as well as features that are specifically created for children in the emerging world. It also comes equipped with education-oriented tools, including a Web browser, a rich media player and an e-book reader.

Intel, meanwhile, bills its Classmate PC as a small mobile learning assistant and educational solution that runs the Windows operating system and industry standard applications.

One big question is whether Intel's decision to pull out of the OLPC will affect Microsoft's decision to develop a version of Windows XP for the OLPC. James Utzschneider, a general manager in Microsoft's Unlimited Potential group, blogged about Microsoft's role in the project last month, saying Windows XP for the XO won't be ready for widespread use until at least the second half of 2008. Microsoft could not be reached for comment.

It also remains to be seen if the Classmate PC and OLPC public squabble will spill over into the CES Show next week. Intel President and CEO Paul Otellini is slated to give the Monday afternoon keynote at CES. No word on whether Negroponte will be at the show hawking the OLPC. Calls to Intel and Negroponte were not returned at press time.

Given the hard feelings, Dikman says it is likely that Otellini and Negroponte will likely make some politically safe statements that sidesteps the battle that remains to be fought with both Intel and OLPC wooing developing countries with their respective products.