Will OLPC be the TiVo of PCs for emerging markets?

(Credit: OLPC)

With the dust-up this week about Intel leaving the fold of OLPC, it got me to thinking: Will One Laptop Per Child become the TiVo of PCs for emerging markets? In other words, they spark the revolution but gain relatively little from it.

TiVo of course almost single-handidly created the DVR category and market. Their technology was very well executed, they created a user experience that is still unparalleled in terms of ease and joy of use, and with continual roll-out of innovative capabilities that kept stretching the definition of the product.

But ultimately their business model proved insufficient to the task of dominating the category that they had created, and the superior user experience and features were not enough to compete with the "good enough" offerings sold with monthly subscriptions from cable and satellite providers. If "great design" were all that mattered in making a product succeed, by all rights TiVo would own the DVR market, but sadly that is not the case. The fast followers have largely taken over the market.

OLPC has many of the same traits: Tightly integrated user experience, innovative design and features, and a rather shaky business model that is hard to see how it will scale well. Ultimately OLPC's legacy is likely to be similar to TiVo's too: it sparked the market and brought attention to it in a high profile way. But others with more clout, better understanding of the business imperatives, and the distribution and manufacturing muscle to back it up will in the long term come to dominate. Creating a platform of ingredients, rather than trying to be the all-in-one marquee solution, is probably going to be the winning strategy, as it has been with DVRs.

OLPC has had partnerships to help build out their capabilities, but the bickering as described by Charles Cooper is emblematic of the strains that occurred with TiVo and its early service provider partners. There is the dance of each wanting to dominate, and each waiting for the tipping point when it makes more sense to go it alone. In OLPC's case, as with much of the effort's history, it is happening embarrassingly publicly.

Let's hope that these fast-followers don't take the lazy way out and just sell cheap PC's, but instead design them based on a rich and deep understanding of the cultural needs of the children, teachers and schools who will use them. Ideally these will appear out of the cultures themselves (similar perhaps to the Asus eee PC), and given the globalization of design and engineering capabilities there's no reason why that couldn't happen.

[Mainer_ayah]

Don't count TiVo out yet in their being the leader of the pack. What is little known and rarely considered, especially by the media, when assessing TiVo's success is the current status of their patents. In a US patent office review of their "Time Warp" patent, last month, which covers the abilities to pause and rewind live TV, and to view a program still being recorded from it's beginning,and also the capability to record one program and view another previously recorded program at the same time on the same source device, it was determined that the patent covering these features was valid, and in the words of many are bulletproof. All these Basic DVR functionalities that the "good enough" copy cat infringers have built into their boxes, if removed, on a court order let's say, would turn the DVR's back into plain old cable boxes.

Of course a patent is only as good as it's owners ability to defend it, and here again TiVo has it's bases covered. In a Jury trial in Texas against Echostar (Dish Network) they were awarded damages, and Echostar was ordered to remove the infringing functionality from the DVR boxes that they sell to their customers, that number above a million. Of course Echostar appealed to the federal court immediately, and that appeal is currently in the system. Oral arguments were heard by the court in October, and a decision by the panel of 3 judges is imminent. Some experts in these matters think that decision is only weeks away, those same experts feel that the likelihood of Echostar prevailing in their appeal is as low as 15%.

So, I think two things are likely. In a future follow up to this article Mr. Richardson will be trying to draw different simile to the OLPC device, and that (IMHO) TiVo's share price will soar after the decision by the federal court.

--Mainer