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TECH TALK: Emerging Technologies, Emerging Markets: Emerging Technology 1: Personal Computers

January 2nd, 2002 · No Comments

Ever since TIME nominated the Personal Computer (PC) as “Man of the Year” in 1982, the PC has been at the forefront of the digital revolution and our attention. I remember in 1982 programming in BASIC on a computer with all of 64 KB RAM, which then had cost Rs 200,000 in India. Each year has brought about new advances as increasing processor speeds (driven by Moore’s Law) have been matched by other equally rapid technological developments in memory and storage.

A recent article on CNN discusses the 20 factors that will change PCs in 2002, and looks ahead to the desktop and notebook PCs in 2004. The challenge is what to do with all the huge power and storage that is becoming available. Two distinct trends are emerging: the Office PC becomes a window to the Internet, and for various productivity applications (thus not necessarily needing the horsepower that is available), while the Home PC is on its way to becoming the hub for digital entertainment – the world of convergence is going to home, but will be Internet-and-PC-centric, and not TV-centric. (Read Stephen Wildstrom’s views on this in his Business Week column: What Steve Sees on the Horizon.)

Emerging Market Perspective

The PC is still too expensive. What is needed is 30% of the functionality at 30% of the price-point to make the computer a mass market device. The cost of the PC has remained relatively stable even as the capabilities have increased. But to increase adoption beyond the 2 million units a year, the cost has to come down dramatically to the Rs 5,000-7,000 (USD 100-140) level. This is what will drive adoption in enterprises and homes in India.

What is needed is the use of lag technologies to make it happen. We don’t need a 1 Ghz processor, a 400-500 Mhz processor will do just fine. We don’t need a 40 GB hard disk, a 6-8 GB disk is adequate. But the challenge is where does one get these components today? Can these be put together cost effectively?

The TV industry has in the past few years due to aggressive marketing and competition seen the prices fall for the low-end units to about Rs 5,000 from the Rs 15,000 level. One may get a much smaller TV, but at least there is a model available. Something similar needs to happen with PCs – this will not drive adoption in the Home, where consumers may want all the multimedia features, but can dramatically increase adoption in enterprises, especially the small-and-medium enterprises. Taking computing to higher penetration levels within enterprises is the first step in jumpstarting the productivity revolution in India.

The computer remains the building block for technological change in every economy in the world. Everything else is built around it. It is therefore necessary to rethink its construction in terms of the components used to dramatically reduce the price-points at which it is made available in the emerging markets of the world. What is needed is not greater and faster, but lesser and cheaper.

Tags: Tech Talk

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