Cheap as (computer) chips

23 July 2007

According to this BBC story, suppliers have got the go-ahead to begin production of parts for the so-called “$100 laptop”.

The “one laptop per child” programme is designed to give children in the developing world access to computers. According to the BBC, the company needed at least 3 million orders to make the scheme viable.

Margins in laptop manufacturing are already tight. A procurement director from HP recently told a conference that margins on their laptops were only 4 per cent.

It must have taken a ruthless procurement strategy to acquire the parts to make such a cheap laptop possible. It would be interesting to know if they had to twist the arms of suppliers to get involved, or they tried a collaborative approach.

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