CES Hype Ignores Emerging-market Innovations

The dust is still settling in Las Vegas after 140,000 techies gathered for the annual Consumer Electronics Show (CES) last week. A hotbed of trends, gadgets and futuristic predictions, CES hints at the year’s soon-to-be hottest products and establishes solid predictions for the direction of the industry. This year’s show, responding to increasing media attention, attempted to shine a spotlight on solutions designed for developing countries. With industry representatives from the One Laptop per Child initiative, Qualcomm, Voxiva, AMD, Intel, Microsoft, and Cisco, CES hosted “Technology and Emerging Countries: Advancing Development through Technology Investments.” Even with the emerging-market star power of some of the world’s largest companies, coverage of the session was noticeably absent from CES press reports.

The absence of media attention on technology solutions for developing countries is not surprising. CES, traditionally, has been focused on the bells and whistles of the technology industry. The demand for sexy gadgets and flashy form factors keeps announcements comfortably far from reality and, as a result, only a fraction of the technology gizmos demonstrated make it to market. Successful emerging-market solutions are less often about flashy technology and more about shifts in business models to address day-to-day user needs. While new business models for and investments in emerging markets are not of particular interest to CES bloggers, they continue to be of interest to Wall Street.

Strategic investments that drive growth and true innovation in developing-country markets may be overlooked in the coverage of this year’s CES, but IT analysts are responding to them favorably. IBM, for instance, was rewarded by investors this week when their earnings report showed continued strong growth in emerging markets, making up for a slowing tech spending in the US. For companies just getting into the emerging-market game, there is still time to generate near-term revenues through smart investments. But newcomers are advised to ignore the tech-show drama of “devices in search of a market”, and balance technology innovation with business models and internal restructuring that will enable emerging-market growth.

Also in the news:

• NComputing takes on enterprise
• Apple loses negotiations in China
• OLPC to make XO laptop available in United States

NComputing Gets a Leg Up in Low-cost PC Space

Recent articles praised NComputing, a company specializing in multi-user PC solutions, for its deal to provide every k-12 Macedonian student with one-to-one computer access. Prior to this, NComputing’'s customers were mostly suburban, developed-world school districts and government offices. The company has sold over 500,000 seats in less than two years. The Macedonia deal demonstrated that developing-country ministries of education may be a receptive market. This is the second foray into challenging the computer industry for NComputing’'s CEO, Stephen Dukker, who founded and led eMachines,– often credited with driving down the price of personal computers (PCs) worldwide.

NComputing’'s success shows that perhaps the needs of a suburban school in Dallas are not that different than those of a Macedonian school district. Both customers were looking for a solution that could stretch their existing technology budgets to accommodate more students. Capitalizing on existing PCs in under-equipped computer labs, NComputing’'s technology turns one CPU into individual computer access for up to seven students. NComputing built upon existing technology and previously-tested solutions to address a fundamental need to increase one-to-one computer access in emerging economies. Like many emerging-market solutions, the beauty is in the simplicity. The education market agrees. In a recent roundtable discussion with Vital Wave Consulting, Dukker explained that NComputing’'s biggest limiting factor is not demand but rather a robust enough channel to distribute the technology.

Research by Vital Wave Consulting suggests that NComputing'’s approach of adapting current technology for emerging-market needs has merit. (Indeed, the company has had more success to date than other high-profile, low-cost PC initiatives.) Vital Wave Consulting favors this approach as one of the key strategies for success in emerging markets. With straightforward technology adaptations like NComputing'’s multi-user solution, corporations could penetrate developing-country markets without undue disruption to current industry and technology processes.

Also in the news:

• 3Com Goes After Cisco in Emerging Markets
• Cheap Laptops are Still Missing in Action
• Ericsson’'s Approach to Low-End Markets is More of Same