Although the project seemed threatened in early 2006 from all sides these were minor compared to the problems to come. The biggest concern at the time was lack of an LCD panel manufacturer, but Negroponte and CTO Mary Lou Jepsen managed to charm another eccentric Taiwanese billionaire. Wen-Long Hsu—founder of southern Taiwan’s Chi-Mei conglomerate—is the owner of the world's largest collection of Stradivarius violins, and he played one for them when they visited to sign contracts.

By the fall, everything was working great in prototype form. Quanta agreed to run its first batch, and even agreed to run a suspend-resume hibernation test cycle 1000 times on each test machine. Normally, test units were give this cycle four times, so it was a particularly unusual request. Then, at 3am on the first day of mass production, Jepsen got a call. Everything was shut down; the laptops were going to sleep and not waking up.

"All hell was breaking loose." She hauled ass to the manufacturing lab with a few other guys and started pumping the caffeine.

Eventually a Quanta guy named Gary Chang and an OLPC guy named Richard Smith ("He's from Arkansas, looks like surfer dude") solved the problem. "We were calling it the second shot from the grassy knoll," says Jepsen. Apparently, as the system was shutting down, electromagnetic noise was corrupting data, screwing up the instructions that told the thing how to wake up again.

At around the same time, the maker of the wireless chips, Marvell, decided to update the firmware for the radio, and they started to crash. "We had four people in four time zones working on that problem," said networking engineer Michail Bletsas. "Mark Foster in Taipei, me in Boston, someone in India, and someone in Santa Clara. We had to program a workaround on the fly: It's in the radio, something you're not supposed to touch under normal consequences."

"A lot of those stories weren't told," says Jepsen. "We weren't hiding it, everybody knew, but we weren't broadcasting it. We figured it all out, and shipped a million of them."

Threat Level Rising
By late 2006, Intel had finalized its specs for the Classmate PC. Though it would cost $30 to $40 more than the XO—the "$100 laptop" in the end cost $188—the Classmate had a faster processor, Intel brand equity and the option of Windows XP as the OS. (Bulk buyers could also opt for Linux.) It was seductive in that it wasn't the revolutionary product that the XO was, but something more familiar, and in line with what ministers of education might have been considering already. What's more, it was a reference design that regional companies could license and customize to fit their needs. And, perhaps, countries rife with pirated software infrastructure had plenty of free programs to run from the black market.

As it began pilot program, Intel's strategy was seen as more traditional too: Laptops could go to teachers, or loaned to students. It did not enforce Negroponte's logical but strict mandate, that the laptops be given to the children, and that they should only be deployed when there are enough to go around.

In the middle of 2007, Intel and OLPC entered into a partnership that was probably more of a hindrance to each other's initiatives than any sort of help. From the start, the deal was vague, more of a mutual appreciation society than a true strategic alliance. Six months later, it had dissolved in acrimony. OLPC accused Intel of pitching Classmate to would-be XO customers; Intel griped that OLPC wouldn't stop asking that the Classmate be discontinued in favor of the XO.

Meanwhile, Intel's more profit-minded operatives were hanging out in Taiwan, spinning the baby laptop idea to one of Quanta's arch competitors, a little known company called Asus.
On June 8, 2007, while both the XO and the Classmate were still deep in pilot testing, Asus introduced the Eee PC, a $400 mini-notebook running a warm-n-fuzzy flavor of Linux. Not only did it resemble the Classmate more than a little, it was unveiled at a press conference hosted by none other than Intel. It would be ready for sale worldwide by that winter, and when it did become available, boy did it sell like hotcakes.

Sales Figures, Sales Facts
"Selling like hotcakes" is an expression that doesn't mean anything in particular. In many cases, "selling a million" doesn't really mean anything specific either. I've heard OLPC people say they've hit the million mark, but in terms of actual shipments, it's not true.

Due to issues that have nothing to do with hardware—and largely to do with Negroponte's greater mission of educating the world's poor—the XO spent most of 2007 in beta testing. In early November, OLPC launched the "Give 1 Get 1" $400 charitable promotion for US buyers, but the first real bonafide XO deployment happened in Uruguay in on December 1. Confirmed orders might have topped a million at this point, but the number of existing XOs, both sold in the US and deployed en masse to schoolchildren in Peru and Uruguay, hovers around 500,000.

Ask Intel how many Classmate PCs are out in the wild, and you get a vague stat, somewhere in the "hundreds of thousands." Intel, too, promises large numbers to come. Portugal will be buying 500,000 of them for the coming school year, for instance.

The Eee PC, though, is already nearing 2 million sold, having hit 1.7 million in the first half of 2008. It is on target to reach a promised goal of 5 million by the end of the year. (By contrast, OLPC will most assuredly not reach 1 million by the end of 2008.)

The success of the mini notebooks has largely been due to price (even expensive ones rarely touch $600) and their intentionally internet-friendly design (you're not going to load up Photoshop CS3, but browsing and email checking work fine). They are also boosted by the negativity surrounding Windows Vista: By running Linux or Windows XP, they present a desirable alternative to the bulkier, more expensive, resource-heavy machines required to run Microsoft's latest OS.

In the wake of the Eee's success, over 40 mini notebooks have hit the market over night. The top four best-selling notebooks on Amazon fall into this catetgory.

At this point, even if the millions of third-world students eventually get laptops, it's unlikely that the XO will be the one they receive. Still, the past two years are definitive proof that Negroponte can take credit for the birth of an entirely new kind of PC.

And Negroponte does claim credit for the Eee PC's success. In fact, he says it's why he introduced the next version of the XO laptop—a radical two-touchscreen device aimed at a $75 pricetag—so early.

Encore?
I asked him why, with the first XO so clearly in its early stages of shipment, would he show off the XO-2. Sure, he doesn't have customers at Best Buy who may hold off because they know what's coming, but it seemed to take away from the momentum of the original device, not to mention confirming some of its criticisms (underpowered, cramped keyboard, etc.).

"When we announce something now that will be in play two years from now, it's partly to give the manufacturers something to start copying now," he says, elaborating, "If you go back two years and you look at the press, [the XO] was dismissed, it was not possible. Then came the Classmate, then Asus. If I underestimated anything, it was how fast people would [copy] it, even if they didn't get down to the same price or didn't have the same features. It was a movement—a hardware trend—that happened because of OLPC."

He also hopes that the announcement of the XO-2 concept, one that only exists in pictures, will stimulate small developers who work on components. Jepsen's new company Pixel Qi will focus on the next-generation of LCD touchscreen, one that can be made as cheaply as current screens today, but have capacitive touch built right into the active matrix, making it thinner than an iPhone screen. Others who saw the XO-2 renderings have already begun pitching solutions to the group.

Not a Manager
If there's one criticism made against Negroponte that's indisputable, is that he changes his tune.

In the beginning, Negroponte repeatedly affirmed that the XO was to run "Linux or some other open source operating system." After a long struggle that could easily be the subject of another series, the XO has recently been made capable of booting both its own Linux OS with Sugar interface, as well as Windows XP. (Critics say that Negroponte never allowed OLPC's Linux OS to mature so that it could stand up to pressure from the Windows advocates.)

Likewise, he was adamant at the beginning that his laptop be the only one shipped to these third-world educational programs where there isn't so much a "market" as there is a case for charity. He says now that if there is a true market—schools and families with the means and desire to buy their own laptops—others can serve it.

Inside OLPC, the leader's mercurial nature and changing priorities proved too much for the talent he had assembled. On the software side, Walter Bender and Ivan Krstic left after open disagreements with Negroponte—mostly pertaining to the adoption of Windows, but also to the overall goals of the program. Jepsen left in January 2008 in what she says was an amicable split, though other hardware experts including laptop maestro Mark Foster had abandoned ship earlier, possibly because they couldn't get along with Jepsen. Most people seem rankled by the credit that Yves Behar took as the "OLPC designer," most notably in a Wired article that would seem laughable to anyone who read Part 1 and Part 2 of this series.

When talking to staff members, there is a sense that no one really got along, and that the religion that Negroponte had instilled in his lieutenants, enough to get them to hang together for two years, has dissipated. The rocky Intel alliance and the move toward Windows were just the final disillusionments. Negroponte spoke the painfully obvious to BusinessWeek last March: "I am not a CEO. Management, administration and details are my weaknesses."

Pulling an Obi-Wan
Still, Negroponte and whoever has stuck by him charge onward. He said, to us and to others, "OLPC is not a laptop company." He himself said that to be taken seriously, you have to build hundreds of thousands of laptops every month; Quanta currently outputs a reliable stream of around 50,000 per month. Now that the mini-notebook movement is in full swing commercially, perhaps the focus should veer from hardware development. Why then stay in the hardware game? Perhaps it's telling that, on the OLPC website's own "Progress" page, nothing is mentioned after December 2007.

Bletsas—who remains hard at work on OLPC today—says that if OLPC does not stay in business, the laptop makers who followed the XO design cues will start doing what they do best: bumping the specs, upping the prices and keeping product too expensive for the foundation to use it in its educational mission. "Unless we keep designing, showing the world it's doable, I don't think they will follow in that path," he says. "If we stop at this stage, they are not going to come down enough for us to use their machines. We have to push them at least one step further."

Want more on OLPC's secret origins? Jump back to the earlier sections:
Part 1 - Genius, Hubris and the Birth of the Netbook
Part 2 - US and Taiwan's Hardware Lovechild

In November of 2005, Nicholas Negroponte and his OLPC CTO Mary Lou Jepsen traveled to Tunisia for the UN-sponsored World Summit on the Information Society, where they were able to present a "working" $100 laptop concept to Kofi Annan, UN secretary general. No longer did the machine rely on that pop-up rear-projection display; it was smaller, made of green plastic, and had a crank for the kids to work—for 10 straight minutes per hour of use—when they had no other access to electricity. It was a vast improvement over that January's pup-tent rear-projection laptop, hampered only by the fact that it was an absolute fake.

One attendee described it as a "balsa model with a keyboard and an LCD with a thick cable attached to a box under the counter." Others noted that the screen froze up during Negroponte's demo. Worst of all, when Annan himself approached the device with the sole intention of making Negroponte and his mission look good, the secretary general broke the crank handle. Clean off. Overnight, the broken handle story became an internet vote of no confidence. It was time to make this concept into something that would work. And that would take help.

Make It So?
As we covered in Part 1, whether Quanta founder Barry Lam's deal was a charitable donation or a crafty decision to get some fresh MIT thinking into his own laboratories, the dreamers from Cambridge started in earnest with the best laptop engineers in the world. Jepsen and others spent two years shuttling back and forth from Cambridge, MA to Taipei, Taiwan. (She actually filed her income tax return as a Taiwanese resident in 2006.) The American scientists would bring ideas to Quanta's engineers, who would either approve them, or disapprove.

"Oftentimes I'd be presenting my ideas in this large boardroom with five EVPs on one side and five EVPs on the other side, and they would point out reasons it wouldn't work, things I couldn't have known, that are somewhat trade secret. I would take these down, saying 'These are really good points—when I have answers, can I come back and present them to you?' In three months, I'd come back for more."

As engaging a process it was for the Americans, it seems that Quanta's people were a little annoyed by the game, at least according to what Quanta's OLPC overseer Dandy Hsu told a reporter from Taiwan Review. For one thing, OLPC didn't order up its laptop from Quanta's speedy-delivery menu, like the big brands do. And for another, OLPC's unfinished OS made motherboard testing a huge pain. "This made the process long and complicated," Hsu told Taiwan Review. "We'd make assumptions in the design, but later, when we got the software, we would need to make changes to the hardware."

What Hsu didn't tell the Taiwan Review was that throughout this process, any motherboard changes made by the OLPC team—that is, some of MIT's brightest minds— were added to Quanta's reference design, and therefore its intellectual property. Quanta had 100 staffers on OLPC on a regular basis, and perhaps 200 at peak times, but it got some good R&D in return. Quanta built a consumer-friendly prototype of the XO to add to its menu—one that has become a standard netbook reference design—and OLPC can't challenge the company to a patent dispute.

As much as it sounds like a Terminator movie, it's true: Quanta could use the XO's own blueprints to build something that could destroy it.

Big Differences
The point of OLPC's hardware endeavor was to create a laptop that didn't resemble all the others out there. In spite of the ambitious $100 target price tag, the largest constraint on product design was not cost but power consumption. Because CPUs tend to draw as little as 1-2 watts of power, while screens draw 7 watts at the minimum, the radical idea was to build the rest of the system around the screen. Cheap, safe battery design and energy efficient wireless connectivity added to the challenge.

Green Inside and Out
In the early days, when Negroponte and crew were talking to manufacturers, a big laptop maker—"who shall remain nameless," says Jepsen—told them that it would cost $25 to $30 extra to make them green. "We made the difficult decision that we couldn't afford it, but also vowed to do the right thing at every step of the line to make them environmentally friendly." Because they were choosing parts from scratch, and because they adhered to the "reduction of hazardous substances" (ROHS) standard, the XO became the greenest laptop ever made. Though many colors were tested out, the "playful" green and white design that was chosen was perhaps the most fitting. (Though I still kinda like the red limited-run ones I saw at OLPC headquarters.)

Battery
"Normal laptops use lithium ion, but every six months or so, there's a large recall because sometimes, in bad batches, they explode," says Jepsen, arguing that they wanted to "go the extra mile on safety." So, if they couldn't use batteries that occasionally blew up and burned at 1000º C—and nickel metal hydride was too expensive thanks to a precious metals boom—what was left?

The answer, one that Quanta brought to the table, was lithium ferrophosphate. It rarely explodes, and burns at a slightly less painful 100º C in a fire, and it has a very long life, 2000 charge/recharge cycles. Most laptop makers aren't into it, since its charge density is light—it's currently more often considered for electric cars. Still, because the OLPC team believed they only needed a low-power battery, they opted for it, ordering up a battery that produces just 20-watt-hours, versus a typical laptop battery's 80-watt-hours, and has no circuitry of its own so the replacement cost is very low. Those perceived benefits, particularly the lack of circuitry, have been called into question, though, because the XO doesn't get the battery life it's supposed to. NiMH may be a tad greener overall, but according to Jepsen, "there's some suggestion that [the lithium ferrophosphate] decomposes into fertilizer."

CPU
The team figured out that they could save an awful lot of energy by having the CPU flick off in tenth of a second when it wasn't needed, and power up again when something demanded its attention. Jepsen says this would be deemed heresy at Intel, but they wouldn't hesitate to shut the screen off. The complexity, in Bletsas' mind, was that there are three different sets of firmware all interrelating: the main one that runs the show, the embedded controller chip for the keyboard, and the networking chip, which has its own CPU. In the end, the on-and-off flickering power-saving innovation hasn't fully worked on the Linux OS, but it apparently does work when the system is running Windows XP, so the issues are considered software problems.

Networking
The Wi-Fi radio works independently of the CPU because it has to form the XO mesh network. A big part of Negroponte's dream, this network is famously intended to blanket a town so children's data can easily be shared, even when given computers are in a state of rest. This caused a problem for the component, a USB device, and required tricking the radio to stay awake when its master went to sleep. "It took many tries to get that right," says Bletsas. Also, because of the USB interface, the flicking on and off of the CPU played havoc.

Those Little Antennae
The XO wouldn't be the XO without its hallmark green antennae, an attribute that gives it a ridiculous Wi-Fi advantage over, say, a MacBook Pro. The MBP's aluminum body is actually especially bad for radio transmission, says Bletsas, OLPC's networking guru. It was he who argued strenuously for the antennae, as you can see in his none-too-artful sketch: Though Bletsas proved that such a placement would double the wireless reach of the XO without demanding a milliwatt of additional power, the request didn't make designer Behar terribly happy: "Two ugly antennae to place on top of a laptop?" he recalls. "It was a huge challenge." Luckily the team turned those pointy green lemons into lemonade. "We used them to give the laptop personality, make it look friendly and fun," says Behar. "It became an icon for the laptop." As you can see, they were almost little stubby things, less rabbit, more cat:

Keyboard
One of the most underrated developments on the XO is the keyboard. Admittedly it's a little tricky to type on it with grown-up hands, but it's the only keyboard that is shows Ethiopian characters and layout, for instance, and it can be easily configured for other languages and dialects as well. The process is achieved through screen printing. "With one single printing pass, we can very quickly localize the keyboard," says Behar. It can be modified in low quantities and reasonably quickly too, with only a month or so leeway to set it up.

Screen
Beside the ears and the impressive mesh network, the screen was a signature trait for the XO, and one of the only innovations that merited some solid patent applications. For starters, the flickering CPU meant something had to be done to keep the screen from strobing as well. The team designed a controller chip with onboard memory which kept the images on the screen alive.

More importantly, the LCD panel itself, though it came straight from a plain-vanilla LCD fab, had some never-before-seen twists: In basic use, the $35 component displays color at a resolution of 800x600 pixels, with a backlight so that it's easy to see indoors. However, when outside, a switch can change it to a completely different screen, one that is monochrome, uses reflectivity to conserve power and improve visibility, and has a far tighter resolution of 1200x900 pixels.

Though she was OLPC's chief technology officer, this is Jepsen's claim to fame—some people on the internet refer to it simply as "Mary Lou's screen." Even critics who don't wish to give Jepsen undue credit for the whole XO laptop say that without her LCD breakthrough, the screen would have cost at least $20 more, would have had far fewer pixels, and probably would've tied up the development for six extra months.

Triple Trouble
It didn't take long, though, before OLPC got totally hosed. It started in March 2006, when Quanta was about to mass produce the first run of XO motherboards. OLPC has surveyed a poll of potential buyers in various developing countries, who overwhelmingly asked for a faster processor. That isn't an easy fix, especially when you're about ready to go into mass production. You can almost hear the guys at Quanta saying, "Something that would have been nice to know last year!!"

Then, Quanta screwed over OLPC by selling off its display division. As we mentioned in Part 1, the screen is the most expensive component, and the OLPC had designed a really special one to keep prices down. Quanta's owner Barry Lam may have loved the mission, but business was business, and when he sold the LCD plant, the company who bought it told OLPC to screw off. As Jepsen was returning home, she was not just exhausted and disappointed, but fell ill with adrenal failure. Her flight to Boston was forced to make an emergency landing.

With Jepsen barely on the mend, and a whole new stack of problems to solve for everybody, OLPC took a third blow square in the jaw: In May 2006, Intel announced it would go into the business of building laptops for teachers and students in third-world countries. Sound familiar? CEO Paul Otellini even showed off a prototype of the more powerful "Eduwise" laptop, soon to be (wisely) renamed Classmate PC. It was the first of many spiritual clones of the XO, and the beginning of even tougher times ahead for Negroponte and his team who hoped to ship millions of their own laptops.

Come back tomorrow for Part 3, the final installment of OLPC Secret Origins. If you're just jumping in, hop back to Part 1, where Negroponte announces his dream and pulls his team together.

From the moment Nicholas Negroponte showed off his $100 laptop concept at the Davos world economic summit in January 2005, it was as if the tech world's supermoguls were glowering down on him in judgment. Over the course of the year, Craig Barrett, Michael Dell, Bill Gates and Steve Jobs weighed in, privately declining support and in some cases publicly disparaging the idea.

The naysayers had a point. The mockup Negroponte was toting around that winter was one ugly baby. It aimed to reach the $100 price tag by having a slower processor, a skinnier internal drive, a smaller body and let's not forget that tent-like rear-projection screen that made it look like the conceptual heir to the pop-top VW Vanagon camper. But after three and a half years, Negroponte's crazy idea hasn't only produced the XO, a real laptop co-developed and manufactured by the world's largest notebook maker, it's also become a product most of Negroponte's opponents are now copying.

After interviewing Negroponte himself, along with his original CTO Mary Lou Jepsen, designer Yves Behar, advanced technologies VP Michail Bletsas and others, we can explain how this proposed global humanitarian effort may in fact be more successful as a revolution in hardware design, and how OLPC will continue to influence the hardware you buy, even if you never score an actual XO.

Negroponte—generally Nicholas, occasionally Nick—is a man who is used to coming up with ideas that people laugh at, only to prove them wrong later. He established the not-for-profit One Laptop Per Child organization after years of exploring the more general subject of providing computers for the youth in the world's poorest countries, and he is at the center of any attention that OLPC receives. He has billionaires and heads-of-state on speed dial, and likes to make unusual requests of them. (He may have lacked support from tech's most powerful, but Negroponte's venture had backing from Rupert Murdoch, AMD's Hector Ruiz and others from its inception.)

Sometime in the early spring of 2004, the Negropontes invited Nicholas' MIT colleague Michail Bletsas and his wife over for a dinner of wild turkey—the infrequently eaten northeastern bird, that is, and not the whisky. Shortly after burning Bletsas with the molten sugary part of a freshly baked apple pie during the dessert course, Negroponte announced a secret that had been burning inside him for months: He had dreamed up an ultra-cheap laptop for kids, and he planned to spend the rest of his life working on it.

To say Negroponte is arrogant is to say the Pope has a pointy hat: He founded MIT's Media Lab, for God's sake. He is one of the only people on earth who could have made the XO. But the larger mission of the XO, to become a stimulant of learning and creativity for the world's poorest children before they necessarily have access to electricity and internet connectivity—let alone clean drinking water—that idea has yet to prove itself, and possibly never will.

White Box Syndrome
Negroponte was convinced that you couldn't just go out and buy the kind of laptop he had in mind. Prices are always trending downward, but manufacturers are always countering that by upping specs and adding features. Profit margins remain super-tight, achieved only by reducing costs at the rate of 20% each year.

"There are two ways to make an inexpensive laptop. One way is to take cheap components, cheap labor, cheap design and make a cheap laptop," says Negroponte. "We decided to do the opposite: Cool design and very advanced manufacturing techniques where you pour raw materials in one end, and out come iPods out the other end. That approach is normally not the one taken in the developing world." Typically in poor rural areas, he says, "you see very inexpensive 'white boxes' that are near garbage, both in terms of design and manufacturing."

Negroponte says sending our used PCs to poor countries is the computing equivalent of sending old polluting, gas-hungry cars. Needless to say, computer companies and automakers alike don't generally spend money to design an intentionally cheap product geared for third-world deployment that makes use of the latest engineering breakthroughs and consists of green, easily recycled materials.

The Display's the Thing
The display is the costliest element in a laptop, especially one targeted at $100, so Negroponte knew it needed to be the priority. One of his earliest confidantes (and OLPC board members) was Joseph Jacobson, the man behind E-Ink, so it's no surprise that the highly efficient display tech was an early contender. It failed on three orders, however: Its price never came down—one early target was apparently $12 per screen, eventually revised up to $35—its refresh rate was, and is, too slow for a graphic user interface and color, a user requirement for this dare-to-be-creative contraption, just didn't look right.Another alternative display option quickly failed as well. In 2004, microdisplay chips like TI's DLP were heralded as the Next Big Thing in rear-projection TV technology, a low-cost, lightweight competitor to plasma and LCD. Intel had just invested a lot of money in a DLP competitor called liquid crystal on silicon, and Negroponte wanted to use that for a cheap pop-up rear-projection screen (shown above). Almost as soon as it was announced, however, the LCOS initiative crashed and burned in a spectacular failure, though not before the LCOS-based $100-laptop prototype was mocked up. (CE companies have discontinued most microdisplay TV lines, though they still use LCOS in many high-performance home-theater projectors.)

Team Up
The best thing to come out of the failed Intel mindmeld was Mary Lou Jepsen. She had spent a lot of time working on screens, but had never before designed a laptop. In 2005, Negroponte named her CTO and charged her with developing the screen—a new kind of LCD—around which the processor, keyboard, memory and network would wrap.

At that same time, Negroponte hunted for other ninjas of computer engineering to complete his dream team.

Walter Bender, one of Negroponte's closest MIT collaborators, signed on as president of OLPC, concentrating on the software side and its innovative Sugar user interface. (Owing mainly to its own all-too-dramatic arc, we do not delve into the software history at length in this story.) Mark Foster, a former VP of Apple's notebook division, co-captained the hardware initiative; Bletsas managed the innovative wireless network; and others—Mitch Bradley, John Watlington, Richard Smith and Ivan Krstic to name just a few more—all joined in to work countless hours on this radical, ambitious project.

As the technical plan was being hashed out, Negroponte hired industrial designers—first, a firm called Design Continuum, and then, a bit later, Yves Behar—in order to shape both the brand and the aesthetic of the XO itself.

The US team was set; now all Negroponte had to do was find a company willing to manufacture the sucker. It seems it's one thing to persuade a bunch of wild-eyed technologists that it's time for them to try to change the world, but another thing altogether to get corporations, especially ones with stockholders, to drop everything for a charity.

Though the number of advanced degrees gathered together could fill a phonebook, the amount of ego pressure building up in OLPC HQ proved, eventually, enough to blow the roof off.

One Factory, Many Brands
"Early on," Jepsen recalls, "I tried to get one of the largest laptop brands to sponsor the program. They said no. They looked at my design and said, 'This design would require at least 15 miracles and we have this rule around here, one miracle per product. We're going to pass, but keep in touch!' It was a very nice sort of rejection." She adds, "They were dead right, one miracle per product was a pretty good rule for a product. But this wasn't a product, it was a global humanitarian effort."

Today, a handful of companies in China and Taiwan make pretty much everything. One of the names that frequently pops is Quanta, attributed (often unofficially) with building flagship products for Apple, Dell and others. It makes around 40 million laptops per year, at profits of around $20 per machine.

On one hand, this promotes a sort of malaise. Cookie-cutter manufacturing makes sense to Quanta, since less retooling and larger manufacturing lines spell more profit. But these contract manufacturers increasingly design the products they make for others, at least as far as the engineering goes. As one of the world's hottest melting pots for new ideas, Quanta's design center was the perfect place to take a radical new idea for a laptop. Negroponte knew they might be a little booked, but he had a plan.

Made in Taiwan
Barry Lam is as successful a soothsayer as you can be in modern times. In the late 1980s, he parlayed a small fortune he made from the personal-calculator boom for a venture in the burgeoning industry of laptop computers. Today, he is easily among the 500 richest people in the world, and Quanta, his baby, is the largest laptop manufacturer in the world.

When Quanta announced in fall 2005 that it had won the contract to build Negroponte's $100 laptop, the phrasing seemed a little strange. Quanta had, according to some reports, turned down the project twice before agreeing. Yet the Taipei Times reported that it was OLPC who said "yes" to Quanta: "The decision was made yesterday after the OLPC's board of directors reviewed bids from several possible manufacturing companies," naming contract manufacturers Compal, Inventec and Wistron. How could a total charity case have been at the center of a corporate bidding war?

The company went on to reassure stockholders that this wasn't a money-losing endeavor. The company said it would benefit by "reinventing cost-saving production" through R&D collaboration with AMD and other companies—a clear indicator of losses in the immediate future.

Back at OLPC headquarters, the story makes a little more sense. Though Lam has yet to turn 60—a mere child by Asian business-mogul standards—he was apparently seeking something more spiritually rewarding than just being best laptop maker ten years running, and something about the proposal finally sunk in. "Lam was concerned with his legacy," says Bletsas. "He liked the product, and he didn't care about the financial aspects as much as he cared about the humanitarian cause."

Negroponte visited him in Taipei; they probably met up in the art gallery Lam set up on the top floor of his corporate headquarters, surrounded by magnificent works of Asian art. After a polite discussion, the billionaire-to-visionary tete-a-tete apparently concluded as follows: "He said, 'I don't care if I'm gonna get my money's worth out of it.' It took a strong founder"—that is, someone who could make an unpopular decision and not catch flak for it—"but he bought on the idea, and said, 'Let's work out the details.'"

It turned out to be a shrewd business decision by Lam. The question—one that may never get a straight answer—is whether or not he knew it at the time.

Stay tuned for Part 2 of the OLPC Untold Story...

It's a little off the initial release projection—nowish—but Forbes' tidbit indicates the rumored project's still alive and in the oven. Obviously, it remains mostly a blank slate of speculation—what's the OS going to be? Still WinMo6 or will Dell mix it up? Will it have a touchscreen, QWERTY or both? The list goes on. One thing's for sure, it'll be a certifiable test of the new design chops Michael Dell's been pushing so hard, which we hope are up to the task since there's nothing worse than a poorly designed smartphone. What do you think should go into a Dell smartphone? [Forbes]

Not enough for some, the speculation began to wander into new territory: that Quanta would not be building the same iPhone that another company, Foxconn, is already allegedly building for the initial product launch, but another phone, one "similar in function to those from Foxconn but with a different outer design to fit different markets." Further baseless speculation wandered in the obvious direction, namely, 3G highspeed wireless connectivity and supersized chunks of flash memory.

What's really happening? Steve only knows. – Wilson Rothman

Quanta stock leaps on iPhone order reports [Yahoo News]
Quanta reportedly enlisted as second iPhone contract maker [Digitimes via iTWire]

There aren't many details to be found, but "sources" claim that it's codenamed "Fly" and will have Windows Mobile 6, HSDPA, and possibly a QWERTY. Since we're loath to use a smartphone that doesn't have a keyboard, we hope that last part's true.

In a market dominated by HTC, we'll just have to see what Dell needs to do to bring something new to the table. – Jason Chen

Quanta may be developing PDA handset for Dell [Digitimes via Mad4mobiles]

According to the briefest morsels of info leaking out of the Intel Developer Forum in Taipei, the long-rumored collaboration between Intel and Yahoo to produce their own UMPC device has finally borne fruit in the shape of that rust-colored contraption you see above.

The as-yet-unnamed UMPC is to be made by Quanta Computer, the Taiwanese company apparently involved in the $100 laptop wheeze. Hard facts are still thin on the ground, but the word is that bog-standard Windows XP Tablet Edition is involved, as well as:

"Yahoo's Go for ultramobiles, a joint software effort with Intel designed to deliver digital entertainment on devices that use Intel Viiv technology, including Go TV, and Yahoo photos, music, and other content."

Quanta's Intel/Yahoo UMPC prototype on display at IDF [Digital World Tokyo]

We reported last month that the $100 laptop was going to be a reality, but now Taiwanese company Quanta has made a deal to manufacture these One Laptop Per Child (OLPC) computers, designed by MIT Media Labs. Quanta, which also manufactures systems for companies such as HP, Apple, Dell, Gateway, Sony, IBM, Sharp and Fujitsu, has promised "to devote substantial engineering resources to the OLPC project during the first half of 2006 with the goal of bringing the OLPC system to market by the end of 2006." Based on Linux, these laptops feature a 500 MHz processor, a screen capable of displaying both full color and high-contrast black and white, 128MB of RAM and 512MB of flash memory, four USB ports, wireless broadband and will be able to operate on wind-up power.

Quanta to Make $100 OLPC Laptop [designtechnica]