Who Wants the African PC Market?

Computer Aid International (a non-profit supplier of computers to developing countries), ZDnet UK, and a trio of African universities just released the results of a comparative study of low-cost, low-power computers for the African market. Few media outlets reported on the study, and those that did provided a somewhat inaccurate conclusion: Asus Eee is more suitable than OLPC’s XO machine for Africa. Other devices reviewed included Inveneo Computing Station, Intel’s Classmate PC and NComputing’s X300.

In fact, the full report is more nuanced in specifying which solutions are more suitable for individual users (Asus Eee) and which are better for school computer labs (NComputing X300). Computer Aid International (CAI) and its partners deserve credit for raising some important issues about the African PC market, including infrastructure challenges that can impact the suitability of computing solutions, particularly for rural areas. The report’s emphasis on power consumption and the changes they made to methodology (e.g., playback of downloaded rather than streaming video) is necessary for an honest evaluation of computing solutions for many developing countries. However, some critical issues were buried or not addressed in the study. For example, the Asus Eee tested by three of the four evaluation teams was the 701 model running a Linux operating system, a product that has been essentially abandoned by Asus in favor of models with Windows XP and a larger keyboard and screen. Similarly, the report promises to shed light on the total cost of ownership (TCO) for each of the evaluated devices, but estimates of critical cost factors such as maintenance, training, and replacement from theft or damage are not included in the analysis (see Vital Wave Consulting’s report, Affordable Computing for Developing-country Schools, for a thorough consideration of TCO for school computing solutions).

Though the CAI study is certainly welcome, it is perhaps most remarkable for what is not said – the competitive field vying for the African market is pretty thin. Their champion, Asus, has turned its attention to mature-market consumers, and neither OLPC nor Inveneo have the needed financial backing to rapidly scale in a market as diffuse and challenging as Africa. Intel’s Classmate PC (and other machines based on its reference design) is still around, but Intel’s focus on the low-end processor market may be waning. Of the 5 companies represented in the CAI testing, only NComputing (not yet one of the giants) seems committed to aggressively pursuing the education segment in emerging markets. These efforts may not be able to meet the steady growth in PC usage and private ownership in Africa. The completion of several large undersea cable projects could cause a spike in demand for all kinds of computing devices from Cape Town to Cairo over the next few years as a result of the imminent increase in low-cost bandwidth coming to the continent this year. CAI’s study suggests there’s ample opportunity for companies to step up and meet that demand.

US Mobile TV Initiative May Point to Opportunity in Emerging Markets

A consortium of television networks announced recently the launch of a free mobile television service in Washington, DC. The “mobile DTV” service, supported by the local CBS, NBC, PBS, Fox and Ion affiliates, will provide free access to local television broadcasts for anyone with a device equipped with a special receiver. Receivers can be built into cell phones, laptops, GPS or other mobile devices, and viewers will not need a data plan or Internet connectivity. Not surprisingly, mobile carriers are unenthusiastic about the new service, preferring to capture revenues from subscription-based, on-demand mobile content through their own networks. Nevertheless, equipment makers like Dell, LG and Samsung are building the DTV receivers into netbooks and handsets in anticipation of wider availability this fall. By year end, broadcasters will expand the service to two dozen other US cities – home to almost 40% of the US population.

Mobile TV could be considered the killer app that hasn’t killed anyone (yet), Early attempts to deliver TV content sputtered due to a poor viewing experience or resistance to high subscription fees, but new technologies and alternative service models such as DTV are gaining momentum thanks to the transition to digital transmissions in both mature and emerging markets. Indeed, Cisco and research firm ABI predict robust growth in mobile data traffic globally, with anticipated viewership jumping to 500 million by 2013.

Dell, LG and Samsung are smart to stay ahead of their rivals on this technology. They can maximize the opportunity by working with market-leading broadcasters in select emerging markets to extend the service to these countries. There is ample evidence that demand for all kinds of mobile content is growing rapidly in key developing countries like India and China, and a free service will have great appeal to cost-conscious consumers. Cisco estimates mobile TV viewers in the Asia-Pacific region (excluding Japan) will exceed viewers in Western Europe or North America within four years. Frequent power outages may also cause developing-country consumers to see a higher perceived value in such a service. Imagine the crowd around the netbook when a blackout interrupts the big cricket match.

Technology Giants Ramp up Wireless Health Investments

Several of the largest technology companies in the world announced last week that they are planning to increase their research efforts and investment in wireless healthcare solutions. GE and Intel announced they will co-invest $250 million over the next 5 years to develop remote patient-monitoring devices, a market they think will grow to $7.7 billion in three years. Similarly, Qualcomm will sponsor a healthcare institute in San Diego to support the development of wireless sensing applications. The announcements were likely timed to coincide with the government’s plan to invest $20 billion in healthcare modernization, and to reassure investors that the companies are keeping an eye on long-term growth opportunities despite the chorus of bad economic news.

Vital Wave Consulting notes that the announcements by Qualcomm, GE and Intel (as well as earlier initiatives by Microsoft and Google) are curiously confined to mature markets. Government investment in these markets is designed to address skyrocketing healthcare costs, an aging population and care for chronic conditions. In emerging markets, the drivers of remote healthcare are also significant, but not necessarily the same as those in mature markets. Emerging-market governments hope to provide better healthcare to remote areas, and initiate (rather than fix) comprehensive and efficient health records systems.

There are near-term and long-term revenue opportunities for a variety of health technology companies in both mature and emerging markets. In China, for example, the government recently detailed a massive $120 billion injection to their healthcare infrastructure, and the Indian healthcare industry is expected to grow from $17 to $40 billion by 2012. This increase roughly equals the US government’s planned investment in healthcare systems over the same period, but represents a 17% CAGR, or double the anticipated rate of economic growth in India. The paths to realizing opportunities in the US and India (or any other combination of mature and emerging markets) will be different, and require distinct rhetoric, strategies, and product development efforts. The companies that achieve the most mileage out of their healthcare investments will be those that consider mature and emerging markets in tandem, and if necessary develop specific solutions for each market.