Intel is in talks with Middle East firms over possible partnerships that could see its low-cost, no-frills ‘Classmate PC’ manufactured locally.
The electronics giant’s Chairman Craig R Barrett told Emirates Business that talks have already been held with regional companies, and – while not specifically confirming the lines under discussion – he said that “something like the Classmate PC would be typical of the kind of product we’re looking at.”
“We’re in some preliminary discussions with local suppliers to put production capabilities in locally. It’ll be similar to projects in Brazil, whereby local companies manufacture components for us,” said Barrett.
Barrett refused to name the country in which the potential partners are based. However, Intel is set to make a string of announcements during Barrett’s tour of the Gulf in April, which will see him visit the UAE, Saudi Arabia and Kuwait.
While an Intel spokesperson said that Barrett’s mention of the Classmate PC is only “an example” of the kind of product that the company is looking to produce in the region, a move to bring production of the low-cost, no-frills laptop to the Middle East would be in line with the company’s global push of the machine.
The Classmate first appeared in March 2007, as part of Intel’s drive to increase PC use in developing nations such as Brazil and Mexico. But the launch was at odds with Intel’s fraught partnership with the One Laptop Per Child (OLPC) initiative, which aims to get millions of cheap laptops into the hands of the world’s poorest children.
In January, Intel withdrew from the scheme because, according to press reports, the relationship became unworkable when Intel sales representatives started actively trying to sell their rival – and more costly – Classmate PC in competition with the OLPC model.
In the fallout from this, Intel is actively looking for ‘original equipment manufacturers’ to make the Classmate PC as it vies for both consumer and governmental buyers of the machine. It is also trying to expand the reach of a second-generation version of the machine to the developed world.
In doing so, Intel is focusing on the local manufacture of components to serve regional retail markets, and – according to Barrett – such deals could allow regional companies to more “effectively compete with the multinationals. Increasingly, you’re trying to create platforms that are tailored to the local market, to service the geographical needs.
“Local manufacturing plays a significant role in these kind of platforms. It makes economical, logistical and support sense.”
The move would be typical of Intel’s strategy to move its venture capital away from the US and towards the emerging markets.
The company, one of the world’s biggest players in high-tech venture capital, once made 90 per cent of its investments in the United States, whereas today that figure is about 50 per cent, with an increasing focus on Asian markets.
Barrett says that this is a trend that is likely to continue. “Venture investment can go anywhere where there are smart people.
“I would guess we’ll see that the venture in the rest of the world [will] parallel the use of the technology.”
He predicts that technology use will eventually be divided equally between the US and Latin America, Asia, and the EMEA regions, adding that “I assume that [Intel’s] venture investment will follow suit”.
This would mean that Intel’s investments in the US could one day account for as little as one-third of its total venture capital activity.
Barrett is sure of the importance of the Middle East in all of this.
“Information technology is becoming increasingly important in the Middle East,” he says.
“I try to visit about 25 or so countries each year. Typically, the Middle East is one of the areas I like to visit. I tend to focus on the emerging markets.”
Barrett joined Intel in 1974 as a technology development manager. His career at Intel encompassed several executive positions, leading eventually to his election to the company’s board of directors in 1992. In 1998, Barrett became chief executive officer, and became chairman of the board in 2005.
Laptops for everyone
The quest to build a small, cheap laptop started in the United States with the One Laptop Per Child programme. Since then many electronics companies have jumped on the bandwagon.
The XO-1: The original This clever hand-crank powered machine was developed in conjunction with the charitable One Laptop Per Child (OLPC) initiative. It comes complete with a 7.5-inch screen, Wi-Fi and 1GB flash storage. The manufacturer expects to ship up to 10 million XO-1s to the governments of the 11 developing countries this year. OLPC originally hoped for a retail price of $100 (Dh367), but the machines now go for $188; it recently announced a ‘give one, get one’ scheme in the US, where customers buy two computers for $400, one of which is donated to a recipient to the developing world.
Asus Eee PC: The Eee PC, unveiled in 2007, has been a top seller, and is credited with helping stoke interest in low-cost laptops. The original model, with a tiny keyboard and measuring just 8.9x6.5in, sold for around $399. But the next generation PC 900 model – expected to cost $626 – is rumoured to have a touch screen, a better webcam and increased data storage.
Intel’s Classmate PC: With a low-power version of the Celeron M processor and a seven-inch screen, Intel’s offering was designed for schoolchildren in emerging markets. But Intel is working on a second version of the Classmate PC, which should hit retail outlets in the US and Europe this year, selling at around $300.
Everex CloudBook: A direct competitor to the Eee, this $400 machine has a small screen and keyboard, and uses the Linux operating system. But unlike the Eee, which uses solid-state memory, the CloudBook offers a 30GB hard drive. It also features two USB ports and a webcam.
Elonex One: British company Elonex recently announced a laptop that will retail at just $200. It will have a seven-inch widescreen, Wi-Fi, two USB ports, and a battery that lasts for four hours. It acts as a Music Server allowing you to share music wirelessly both between other WiFi devices.
Intel may produce Classmate PC in Middle East