[IAEP] Brazil deployment

[Edward Cherlin]

Thank you. Clearly the reports we got lost something in translation. %-[

On Tue, Oct 7, 2008 at 12:23 PM, Jecel Assumpcao Jr <jecel at merlintec.com> wrote:
> Edward Cherlin wrote:
>> > [failed December 2007 bid to buy 150K laptops]
>>
>> There is rather more to the story. One of the biggest problems was
>> that the government was proposing not to charge the usual 100% import
>> duty on educational computers, but the agency that proposed that had
>> not communicated it to the agency in charge of the bid process, nor to
>> the legislature, which would have had to approve the change first. So
>> the entire bid process was in confusion the whole time.
>
> The import tax is 60% and it was not, unfortunately waived at all. The
> confusion was due to the state sales taxes (typically 18% on top of the
> import and other taxes) - an agreement was reached with all the
> governors to exclude that and officially published less than a day
> before the start of the process so the guy in charge instructed all
> participants to make their bids without taking into account that tax
> break.
>
>> $420 is what you would expect for a $189 laptop at 100% duty, with
>> school servers and a little of this and that on top.
>
> "A little this and that" included a full three year warranty, individual
> delivery to the students all over the country, individual testing of all
> laptops 60 days after delivery. With all that and the absurd taxes they
> were shocked not to get the same offer Uruguay did....
>
>> The lower bids
>> were evidently below cost, which is a serious issue for a project that
>> may be locked into a specific line of hardware at the real price for
>> many years to come.
>
> Not at all - the two lowest bids were for making the machines locally
> which would avoid the 60% import tariff (plus a few others).

I believe that the correct description would be "assembling" the
machines locally. Right now that would _increase_ the cost of XOs, if
it were possible at all, due to the favorable terms OLPC got from
Quanta for the first five million units in return for other contract
provisions, such as exclusive rights to manufacture.

But this illustrates my main point, below. The cost calculation is
being done on the initial order, not on the planned deployment to the
whole country. I believe that Quanta could be induced to build an
assembly plant in Brazil to fulfill an order of thirty million or more
units over several years.

> Due to
> Intel mentioning $400 as a possible price for the Classmate back in
> 2005, several people have accused them of now offering the laptops below
> cost. I don't agree - I can buy a 7" portable DVD player for $60 in the
> US, a nice low power motherboard for $100 or less and hack together the
> equivalent of the Classmate 1 (plus DVD reader!). If that can be done at
> retail stores for one unit, why can't Intel/Positivo/CCE do at least as
> well for a high volume order?
>
>> The answers you get depend very sensitively on the questions you ask.
>> If Brazil had asked for mesh networking and collaborative software,
>> the XO would have been the only answer. No doubt there would have been
>> accusations in such a case of the bid being "wired" to a preselected
>> outcome. But if you don't ask, you may not get at all.
>
> The mesh networking was actually one of the requirements. The Classmate
> people promised they would have it too. Some of the other proposals (one
> group asked $5000 each for Sony Vaios) certainly must have failed this
> item. An early draft requested 266MHz DDR main memory, which would have
> excluded the XO. Fortunately they changed that to 266 DDR memory (which
> runs at 133MHz). The requirements were mostly very XO-centric with a few
> adaptations in order not to exclude everyone else. I found it
> interesting that nobody tried to sell the Asus EEE - it would have
> matched their description better than any alternative.
>
> -- Jecel
>
> _______________________________________________
> IAEP -- It's An Education Project (not a laptop project!)
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>



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