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Microsoft and AMD teamed up last week to launch the IQ PC, a desktop computer targeting the education market in India. Using local partners such as Zenith Computers to produce and distribute the hardware, the PC is being piloted in select Indian cities with plans for a national rollout later this year. The computer comes equipped with a basic version of the Windows Vista operating system, an assortment of educational software such as Encarta and Student 2007, and an online content repository. The PC appears to be a well-designed education solution, but with a $513 price tag, Microsoft’s latest effort to join the low-cost PC race is being criticized by bloggers and the press for being too costly for developing countries.
Increasingly, media and online coverage of PC initiatives for education in developing countries have focused disproportionately on the price tag of the computing device. Dell’s EC280 sells for $336; Intel’s Classmate PC is coming in at $249; and the One Laptop per Child program’s XO computer (formerly called the $100 laptop) costs $175. Attention on the price of the PC, however, may ultimately be misleading buyers. The total cost of PC ownership (TCO) also includes standard costs such as support, training and installation as well as often-overlooked expenses such as electricity consumption and insurance which can be significant in an emerging-market setting.
For price-conscious customers in emerging markets, understanding the real price tag of technology purchases requires an assessment of costs over the life span of the product. With more comprehensive TCO analyses, buyers are better equipped to make informed decisions. Corporations seeking to combat apples-to-oranges comparisons between education computing solutions will deepen the discussion to one of total cost of ownership. It is only then that the public discourse will address the true cost of computing devices for the classrooms of developing countries.Also in the news:
Almost unnoticed in the low-cost PC craze is the MicroClient Jr., a small, limited-function personal computer (PC) produced by Norhtec, based in Thailand. Designed for environments with limited space or extreme temperatures, the device retails for $85 without a monitor, mouse or keyboard. Norhtec has no flashy marketing campaign and has steered clear of the OLPC (AMD) versus Classmate PC (Intel) battle. And the company is treating the low-cost PC market strictly as a business endeavor rather than a philanthropy project.
Due to their fear of cannibalizing mature-market product lines, multinational PC and chip manufacturers have aimed their low-cost computing solutions at emerging-market consumers. Norhtec, however, has recognized a demand – even among mature-market commercial customers – for inexpensive PCs that reliably perform only a few basic functions. And they’re selling thousands of units. Customers include a Canadian diamond-mining company and McDonald’s franchises.
Norhtec’s strategy supports Clayton Christensen’s theory, widely publicized in The Innovator's Dilemma, that technology innovation will originate from the low-end of the marketplace and eventually evolve to displace high-end technology. While multinational giants are fighting to sell higher-margin products and protect existing product lines from cannibalization, scrappy start-ups in emerging markets are innovating with the low-end customer in mind and finding high-end mature-market demand, as well. Multinational technology companies that overcome their resistance to low-end offerings will be better prepared for the Norhtecs of the world, who will inevitably enter mature markets through the back door.
Also in the news
• Analysts push Motorola to gain momentum in India
• Developing countries strengthen their hand in the global economy
• Intel and AMD battle over low-end laptops
May 2, 2007
Steady Innovation Primes Yahoo! for Growth in India
Yes, there was other news amid the OLPC/Intel hullabaloo this week. This week’s nugget comes from India, where Yahoo! has been steadily rolling out new products, services and strategies.
India’s Business Standard newspaper provided details about some of Yahoo!’s efforts – increased executive staffing, enabling Yahoo! Maps for Indian cities, and city-specific portals featuring localized, user-generated content. Portal users can find photos, videos, maps, podcasts, event information and blogs for 20 Indian cities.
Vital Wave Consulting likes Yahoo!’s relatively quiet approach to these strategic initiatives. Perhaps taking a page from the chronicle of success written by the telecommunications industry, Yahoo! is letting new products and services find traction before making big announcements about them.
The real opportunity for Yahoo! is the potential to radically scale the more successful services throughout India. There are currently 25 million Internet users in India, and usage is increasing most dramatically in urban centers. The number of Indian cities with million-plus populations grew from 23 to 35 between 1991 and 2001. By now, there are more than 40 Indian cities with a combined population of 500 million – all potential customers for Yahoo!’s new services.
Also in the news this week
