Consumption or Charity? A Good Deal Either Way
You may recall the One Laptop per Child (OLPC) project, a remarkable effort to design a $100 laptop for the needs of kids in the developing world. The project did a radical re-design for markets where power is scarce (the energy consumption footprint is much smaller than standard and its solar panel makes it operable even when the power stays off); phone and cable service is spotty (wireless is heavily-integrated); tech support is far away (it's built for abuse from kids); and applications are different (it skips Windows entirely).
The only problem is that with so much proprietary engineering, the XO (as the first model has been named) still costs about $188 to produce. So OLPC is trying out a novel way to move more XOs out the door -- thus lowering future production costs: Information Week and other media outlets report that OLPC is launching a "Give 1 Get 1" campaign. Every time a North American buys an XO for $399, OLPC will donate another to a child in a developing country.
This seems fairly clever: parents are generally reluctant to buy full-featured laptops for their kids, who have no interest in running Microsoft Excel, for instance. And it's rare to find a laptop selling for under $400 in the States. But combining design aimed at kids with the chance to double parents' investment in their own child by supplying a laptop for a child in the developing world -- all at a price-point near or under competitors -- might just be the sort of "double bottom line" strategy that could make the XO a success.
One thing's for sure: competitors will have a hard time building a brand for their bargain laptops that even comes close. The trick for OLPC will be breaking into saturated markets (and distribution channels) in rich countries with their novel brand and unusual product.

