Plug for the Unplugged $100 Laptop Computer for Developing Nations
By HAL R. VARIAN
February 9, 2006
ONE of the more interesting
technology sessions at Davos, Switzerland, this year was Nicholas
Negroponte's presentation of a $100 laptop computer intended for
Mr. Negroponte, the founder
of the Massachusetts Institute of Technology Media Laboratory, announced
that Quanta Computer would be manufacturing the device, based on
a chip from Advanced Micro Devices and the Linux operating system.
Quanta, a Taiwan company, makes about 30 percent of the world's
laptops, so its involvement lends considerable credibility to the
The mock-up that Mr. Negroponte
demonstrated had a spill-resistant keyboard and a carrying handle.
The final version will have a screen that can be read in direct
sunlight, wireless networking capabilities and a hand crank to generate
Despite the technological
ingenuity of the device, it engendered considerable skepticism.
One audience member asked what good a $100 laptop was when network
connections cost at least $25 a month. Mr. Negroponte responded
that the laptops would send and receive Internet data only when
higher-paying commercial data was not being transmitted, leading
to lower networking costs.
Microsoft's vice president
and chief technology officer, Craig J. Mundie, argued that a cellphonelike
device would make more sense than a laptop computer in developing
countries, because the demand for wireless communications services
is strong and growing.
As he suggested, there
are proven uses for cellphones in developing countries: migrant
workers use them to call relatives back home and farmers use them
to check crop prices. There are also successful business models
like the one pioneered by GrameenPhone of Bangladesh, which has
fostered a network of entrepreneurial "phone ladies" who
provide communications services for entire villages. Often cellphone
use among the poor in developing countries involves text messaging,
which is much cheaper than voice.
In the discussion after
his presentation Mr. Negroponte emphasized the educational value
of laptops, while Mr. Mundie and others focused on the business
models enabled by cellphones.
These views are not necessarily
at odds: as with cellphones, there are many potential business models
that can be built around cheap laptops. After all, the most important
application for personal computers back in 1979 was VisiCalc, an
early spreadsheet used by businesses.
Going even further back
in history, the must-have technology of 1853 was the sewing machine.
Its success was largely because it offered purchasers a way to make
money by taking in mending. Isaac Singer capitalized on this application
by inventing a new way to sell products to consumers: the installment
What is the 21st-century
equivalent of taking in mending? Let me suggest that using the $100
laptop as a cash register could be quite attractive. These days,
a cash register is nothing but a personal computer with a different
interface. A simple cash register program plus accounting software
would be useful to merchants whether or not a network was available.
If the computer was networked,
there could be other valuable commercial applications. One could
imagine using a networked laptop as a way to transfer funds, something
like an A.T.M. with a human operator. Such an application is quite
compatible with the Hawala system of monetary transfer that has
been used in the Middle East, Africa and Asia for more than 1,200
years, providing a solid tradition on which entrepreneurs of the
cyberage could build.
Low-cost laptops could
also serve as a way to record and preserve contracts and other legal
documents. The Peruvian economist Hernando de Soto has argued that
the lack of formal titles to land and other property has prevented
the poor from posting collateral to secure loans. Perhaps cheap,
networked laptops could serve as repositories for such documents.
Replicating legal documents across a network using peer-to-peer
technology would ensure that they would remain accessible even if
an individual laptop were lost or stolen.
Telephones are now viewed
as an essential device for commerce, but it was not always so. The
phone was not taken seriously by businessmen back in the 1870's,
since there was no written record of transactions. The telegraph,
which provided such a record, was viewed as far more trustworthy.
Perhaps the virtue of having written (or at least electronic) records
of transactions would be as useful in developing countries today
as it was in 19th-century America.
Of course, written communication
requires a literate population. But that is a good thing. If reading,
writing and typing are the key to employment, people will be highly
motivated to acquire those skills. And, circling back to Mr. Negroponte's
education vision, the $100 laptop can help people become literate.
There are already computer programs to teach reading from scratch
using simple pictures and animation.
The great thing about
computers is that they are what economists call general-purpose
technologies. That is, they provide a platform on which other applications
can be built, whether they are cash registers, A.T.M.'s, document
repositories or instructional tools.
Ultimately, both sides
of the Davos debate are right: cellphones have proven uses and will
continue to spread rapidly in developing countries. But cellphones
have their limits. Offering general-purpose technologies like low-cost
laptops is a riskier strategy, but it just might have a big payoff.
Hal R. Varian is a professor
of business, economics and information management at the University
of California, Berkeley.