The program's stated aim is to bring technology to the next billion people.
Yes, the program is to connect the next billion. The way we do that is to bring out the latest technology all around the world at the same time. The best example I can give you of one of the next connection technologies is WiMAX. You see a lot of information about Sprint and Clearwire in the U.S., but I think the reality is that it is being adopted in the emerging markets just as quickly, and in fact more quickly in some cases, such as Pakistan, South Africa, Vietnam, Chile and Brazil. The reason is that the connections just don't exist there. So why not use the newest technology, particularly if it is the best broadband connection and it's wireless? In other words, you aren't encumbered by existing infrastructure.
That's the leap-frog effect we're seeing in many areas of the world: jumping ahead to the latest technology rather than having to go through the same evolution we have undergone. Plus, these developing areas don't get hung up on what's already there.
Yes, we've seen that in cell phones. But to give you the high-level overview of the World Ahead program -- I'll give you a few bullets. There are four areas we focus on. I don't think you'll find another company in the world that focuses on all four of these pillars. That is one reason why we have a unique angle, but it also becomes a unique responsibility as well.
The first [pillar] is the devices, the appliances. They can just as well be regular PCs. But we also have the Classmate [a budget laptop] for the emerging market. The cost is down to $300 now, and it will get down to about $200 by the end of the year. As a device, that starts to get very interesting. We are going to pilot them in 30 countries this year. I've got it in many of them already.
The second pillar is connection. For this, you have to work with the telecom companies, the cable companies and anyone who adds connectivity.
The third pillar is education. People have to be educated to use the device or to use it for the functions that they need it for. Perhaps the best example I can give is that we've trained more than 4 million teachers so they can use a PC for teaching kids. That's a very large number of teachers. And we've agreed to train 10 million teachers over the next five years. This is so a teacher cannot just use a PC personally, but [he or she] can use it for training kids in school. We've actually had that program going since the late '90s.
Another example is community centers in places like Vietnam, China and India. We're working on using the community centers of the governments to train farmers so they can sell their crops for the going market prices instead of getting ripped off because they don't know what the going prices of their crops are. It might seem crazy for a rural farmer to have a PC, but if you are getting paid $1 a bushel for your crops and the market price is $2 a bushel, it's the difference between sending the
kids to school, and in some cases, the difference between surviving or not.
The fourth pillar is content -- content in native language relevant to the country in question. We have a very large software development group composed of several thousand engineers. We have Intel training, Intel schools. We want people to write software on our platforms. There are tools, there are compilers, there are libraries that are heavily Microsoft, but there are also Linux tools and capabilities. But that also becomes a content resource. So we created something called Skoool. There's a Web site
To look a little deeper into the program, it divides into five focus areas that we put under the umbrella of government policy and industry cooperation. Places like China and India have tens of thousands of community centers opening in villages. They care about small and medium businesses in most countries, because they create 60 percent of jobs worldwide. This is true of the U.S. as well. So if you have a vibrant area there, you can create jobs. Take France, which is investing 12 million euros to create jobs. This is oriented, in part, to using the Web.
The third focus for governments is education because it's about training kids. The other two concerns for governments that are coming up are health care and seniors. These tend to be more topical in developed countries -- the UK, the U.S., Canada, Korea, Australia and Japan. All the programs tend to be government policy, but industry cooperates to deliver. This is becoming a fundamental premise.
When you go into one of these countries, you start by working with the government to get the program in? Then you find partners in the local area, in the business community who are interested in partnering with you?
When you talk about the $200 laptop, how many of these have been sold? How are you approaching it that is different from an MIT project, which requires million-unit orders?
We've been shipping Classmate laptops, which are rugged with a flash drive and cost a little under $300 today. So far, we've distributed thousands. We are not talking about millions yet, because schools need a chance to test it and accept it. We've been testing this in Africa and Brazil.
This really isn't a reaction to anyone else, in that we've been working on this longer than anyone. We've been testing it in Brazil, for example, since about the third quarter last year. Every kid in the classroom gets a laptop, and you start to get feedback. Then you come up with things like theft control. In other words, if a student takes the laptop home and the big kid bashes up the small kid to take his laptop, that tends to hurt the kid's safety. But you want them to take the computers home. So we have to add in things, such as if you take it away from the school, and you don't bring it back, the laptop will no longer work. You have to be registered on the LAN for the computer to continue to work.
The basic idea is you are rolling out these very rugged, durable, cheap laptops that schools can buy any number of?
We've shipped units to about a dozen countries so far. Since we're shipping so many in real time, I can't keep track of the countries. But by the middle of the year, we will have shipped them to more than 30 countries. Recognize that it's an emerging market product, that it's a bit different than a regular laptop. The screen is smaller -- it's rugged. To save money, it doesn't do everything a regular laptop can do. There is no CD-ROM drive, no hard drive. But you can store Windows or Linux on it. You can store [Microsoft] Office on it, there's enough memory there. You can store learning programs. You can store Skoool, and you can download your homework. In other words, it's a strong education consumption device.
The other thing we've learned all our corporate life is that the PC industry is very efficient in building. There are 180,000 small assemblers around the world that screw stuff together. So if Brazil said to us -- and this is a real example -- "I'd like to build hundreds of thousands of these, or even a million," our answer is, "Build it yourself if you wish." That way, you don't have to worry about duties, taxes and all of that. In the case of Brazil, there is an 80 percent duty paid to import PCs into the country. But they have a well established PC industry that can build them.
There are always pluses and minuses with every approach. If Brazil's got an efficient delivery system, why not use it? That's the logic there. Use the local people to build it. Then, if you want to pick up the phone and order more, you can. Or if it's broken and needs some service, or if people need a different capability in the machine some day, they can do it with the supplies they have. And it creates local jobs as well, which is a real benefit, and governments seem to like that.
Is Intel promoting WiMAX and the jump to WiMAX for most of these connectivity infrastructures, in terms of developing countries?
What we care about primarily is that you connect on broadband. The how is secondary. So if you have the satellite infrastructure, which a few can do even though it's very expensive, wonderful; if you have a cable infrastructure, because you are in towns, such as Beijing and Shanghai, fantastic; if you have DSL infrastructure, great. But when you start getting out into remote places, where frankly most of the population in some of these countries lives -- for example, if you are dealing with 100 million rural farmers in China and India, it gets very expensive to reach them. So wireless is a good way of doing it.
So we are not WiMAX bigots. If some have a wireless local loop, fantastic, as long as it's broadband. If you have other capacities, great. It's just that where you don't, we think WiMAX is the most cost-effective broadband delivery service. So we've used it in Vietnam for a community delivery center with kids' education, a library, telemedicine, government services. They can get their checks, pay their bills; the farmers get trained, they can sell their crops. And that's done with WiMAX. In many countries there is an industry deploying WiMAX and this will take care of itself. For example, Motorola probably has 200 people in Pakistan working with the local telecom company WACEEN to backbone the whole of Pakistan with WiMAX.
And on the community front, is the way that you've found to be most workable is to find existing avenues on which you overlay education and training and the computers in that setting?
I'll give you a really good example: the state of Kerala in India. We've been working with them for about two years, and they have been building these community centers. There are two approaches, but only one we believe works.
Approach No. 1 is to make it a government-subsidized community center, and it becomes a service to people. But the problem you have with that is it's open say at 8 o'clock and it closes at 5 p.m. What do you do on lunch breaks? It's not available on weekends. So that's not the best model. I'm not trying to belittle that approach.
A much better model, we feel, is what they've done in Kerala through government policy and industry cooperation. We'll do the template, developing how it should work. The government then just makes it a program that could be done by private entrepreneurs. Those people don't mind working to set something up for seven days a week, 24 hours a day. And then they make their money on services. A good example is if you want a check cashed, or if you want money transferred, you go to Western Union or a check cashing place and you cash your payroll check for $10. Or they will help you with bill paying, or they will help you with any capability for 20 cents per transaction. This transaction might save you driving hundreds of miles or taking your whole day to get to somewhere. And they'll do it for 5 rupees -- or about 12 cents -- in India. In other words, you turn it into something that entrepreneurs can make a business out of.
So a government might have different ideas, but that is the model you would recommend at this point?
Yes. But recognize that we have one unique thing in these four pillars that I talked about. We aren't there to sell a government anything. I don't have to spend my time with a government saying, "Here's a purchasing contract. Here's a legally binding contract." They can treat me as their trusted technology adviser because I don't have that conflict of trying to sell them something, which nearly everyone else does. For almost everyone else, it is a question of, "Are you're going to buy a telephone service from me, or are you going to buy a software license from me, or are you are going to buy a PC from me?" When I approach a government, I don't have that encumbrance. I call on a government as an enabler. Obviously if I do a good job, then people ultimately will buy more PCs that get fulfilled by someone. Or in the case of the Classmate, which can be built by the local channel, but it might just as well be done by a multinational. We don't care who is going to deliver it.
I'm a technology adviser to you, one who has been here for decades and who's going to be here for decades to come. It is a unique role, I think, that doesn't exist in the industry. That opens up unique possibilities, but also, as I said, unique responsibilities.
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