Jan. 3 (Bloomberg) -- Intel Corp., the world's largest chipmaker, dropped support for a foundation working to provide inexpensive laptops to the developing world because the group would only endorse one model of computer.

Intel reached a ``philosophical impasse'' with the One Laptop per Child foundation and founder Nicholas Negroponte after he asked the company to exclusively support the group's XO laptop, Intel spokesman Chuck Mulloy said today in an interview.

One Laptop per Child offers a device called the XO, built around a chip made by Intel competitor Advanced Micro Devices Inc., which it aims to sell for $100. Intel joined the group's board in July, teaming up with former critic Negroponte. He had accused the company of trying to put his program out of business by developing a similar laptop called the Classmate PC.

``Intel doesn't do the exclusive thing. Their view, and it's a smart view, is they have to be free to go where the market is,'' said Rob Enderle, president of the San Jose, California- based research firm Enderle Group. ``The OLPC folks should know Intel couldn't accept the deal.''

Intel's decision today to split from the nonprofit foundation was ``mutual,'' Mulloy said.

`No Single Solution'

``We have long believed there is no single solution to the needs of children in emerging and underdeveloped markets,'' Mulloy said. ``If Intel were to exclusively support the XO over other platforms, it would force us to abandon our relationships and commitments with local manufacturers and suppliers.''

An after-hours phone call to One Laptop per Child in Cambridge, Massachusetts, wasn't immediately returned. Advanced Micro spokesman Drew Prairie also didn't return e-mail and phone messages seeking comment.

Negroponte called Intel ``shameless'' on the ``60 Minutes'' news program last May, saying the chipmaker was selling its Classmate PCs below cost in order to undercut the XO device.

Intel, based in Santa Clara, California, had developed a working prototype for an XO laptop based on its own chips, Mulloy said. That project is now discontinued. Intel will keep supporting the Classmate PC and other low-cost computers, including Asustek Computer Inc.'s Eee PC.

Intel fell 68 cents to $24.67 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have risen 21 percent in the past year. Advanced Micro's stock declined 37 cents to $6.77.

To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net

Last Updated: January 3, 2008 22:18 EST