Om Malik writes about the $300 Massputer for the emerging markets:
A computer that costs $300 for the computing hungry masses in emerging economies like India, China and Brazil. Users of this massputer should be able to do basic tasks like writing documents, Internet surfing, email and perhaps some business-related tasks like data entry.
There are nearly four billion people who live in these emerging markets and assuming that only 10 per cent of them can afford $300 it is still a market of 400 million. Currently, the PC troika of Intel, Microsoft and Dell typically charge $750 for every computer, which most people in these emerging markets find unaffordable. Even the so-called network computers cost an unaffordable $500-plus.
At $300 a machine, the market is going to split wide open. In India alone nearly 55 million such machines could be sold to schools, colleges, government, and small businesses, estimates Netcore Solutions, a Mumbai, India-based company. Multiply this many times, and you see the numbers add up. The total market opportunity for the lower priced machines is upwards of $16 billion. (This is a concept championed by Rajesh Jain.)
The $300 sticker is vital- it keeps the devices affordable, and at the same time allows the corporation selling this massputer makes a decent profit. Gizmos such as color televisions, washing machines, refrigerators and air conditioners were snapped up in large numbers once they were priced right around $300. The proliferation of mobile phones in the emerging world is proof that at the right and affordable price people everywhere will adopt the right technology. There was a time when a mobile phone cost $400 and a mere 10 million people had the service. Now more than 400 million phones will be sold this year and 1.4 billion people, many in not very rich countries, will make mobile calls. That is because the price of the phone at $100 is now affordable in these emerging countries. More users means the price-per-minute has come down as well. In short, everyone benefits.
The social implications of Massputer cannot be underscored. Popularity of cell phones and text messaging promoted social revolutions, and peaceful protests in hitherto turbulent societies in Asia. Philippines comes to mind. I believe the availability of a Massputer connected to the Internet will help develop more educated, more informed and more open societies. If rest of the world has to embrace the principles of free markets, they need the tools. Massputer is a perfect example.
Om is right about the need. While $300 would be a good starting point, and is probably reachable with lower-end processors and open-source software, there is more which needs to be done to make computing penetrate deeper in the emerging markets.
The three problems that need to be addressed are affordability, manageability and piracy. The three key trends that can be leveraged in providing the solution are IT commoditisation (cheap silicon and storage), open-source software and emerging broadband networks. The primary opportunity going ahead lies in providing the solution for a monthly subscription fee with the devices available at costs-plus to drive consumption in the emerging markets.
In India, the upfront cost needs to be about Rs 5,000 ($110) with a monthly subscription fee of $5 for the access device and access to software. Connectivity will cost another $10 or so. This way, the computer’s business model becomes like the cellphone. That is the key to opening up the next markets for computing.