Home

The grey market (in U.S. it's spelled gray market) is the buying and selling of merchandise in other than normal channels.  While the black market is for illegal goods, the gray market is for legal items.  For instance, when something is more expensive in one place than another, often a gray market will start up.  If cigarettes are more expensive in Minnesota than in Iowa, people on the border will go over to Iowa to buy cigarettes, and possibly even resell them.  While importing guns or prescription drugs or smuggling in things to avoid import duty or taxes is illegal and thus black market, the gray market is totally legal, just not authorized by the manufacturer.  This gray market is also called "arbitrage".  Often it's the importer who complains about the grey market, not the manufacturer.  For example, champagne may cost twice as much in the US as is does in France, strictly because of market forces.  Wine growers may not care about the price, but the importers who are making money off of distribution really hate it when people buy a lot of champagne in France, then bring it into the US themselves.

So how can the gray market for the $100 laptop be stopped? 

To keep the $100 laptop from being sold off or stolen, the plan is to make them so incredibly common and designed so obviously for children that people would consider it a social stigma to own one if you were not a student.  For instance, if you started riding around in a mail truck, people would notice, or if you stole something that obviously was taken from a church, people would shun you.  And what adult would want to use a children's CD player stolen from a school, that has limited functions and is obviously marked as being stolen from an elementary school?  The plan is that no more than 2% of the $100 laptops will be sold to others.  

Also, a consumer version sold at $200 to $300 may also be available, for those who really want one.

Also, as more of the $100 laptops are made, the manufacturer won't be constantly adding bells and whistles to increase the price, so the laptop's cost will come down.  For instance, a 2006 model car will be purposely redesigned to make the old one obsolete, and this scenario won't happen here.  Another example - VHS supplanted Beta, and then was supplanted by DVDs, when the original format would still be working fine.  Unfortunately, it's getting very difficult to find new movies in the older formats, so poor people are suffering.  Another example - the military made only one model of the Jeep for years, so that the price would be kept low.  The same for the Beetle.  The price of poverty can be high, as poor people often pay higher prices than rich people do for good and services.  The $100 laptop aims to reverse that trend.