Developing countries need PCs

Developing countries are going to be the major source of sales growth for the computer industry in the coming years as mature markets in North America, Europe and Japan have reached near saturation point, according to industry leaders speaking in Taipei earlier this week.

"The world has digital haves and digital have-nots," Chen Wen-chi (陳文琦), chief executive officer and president of VIA Technologies Inc (威盛電子) said at the VIA Technology Forum yesterday.

"In China, India and many other countries -- as well as in industrialized countries -- many people lack connections to the Internet, and for them we are talking about affordable and rich-featured access to the Internet," Chen said.

By concentrating on low-power performance computer chips, VIA has managed to create computers at lower prices than its competitors, making them affordable to consumers in developing countries such as Thailand and India.

"Thai government-sponsored interest-free and low-interest loans make the PC really affordable," Chen said. "They are choosing VIA processors as well as chipsets. We'd like to see this happening not just in Thailand, but also in Taiwan, China, India and all over the world."

This would then lead to a closing of the gap between the digital haves and have-nots, he added.

Other technology companies are also eyeing developing markets to make up for sales in sluggish developed nations that have seen little growth for the past three years.

Jason Chen (陳俊聖), an Intel vice president, said on Monday during a keynote speech at Computex Taipei that the world's largest chipmaker was optimistic about global computer sales performance in the next three years primarily because of the growth in the emerging markets.

"Emerging markets will account for 40 percent of PC shipments by 2006 from 20 percent in 1999," Chen said. "That's a very significant signal to the industry."

The way to sell to developing countries may be through government projects aimed at increasing computer use in schools and institutions. Wyse Technology Taiwan (台灣慧智), for instance, is selling thin clients -- basic computers that do not have expensive disk drives -- to schools in China.

"Our customers in Taiwan are looking for markets beyond the PC," Phil Pompa, a vice president at chipmaker Advanced Micro Devices Inc -- which supplies the chips used to make Wyse's thin clients -- said on Tuesday.

"They are looking for high-growth markets like thin clients, mobile clients and set-top boxes," he said.

Getting the next generation of computers to price levels below US$200 will also stimulate growth in mature markets, said Albert Sisto, chief executive officer of software developer Phoenix Technologies Ltd.

"Technically savvy people aren't spending the money on new technology products as they aren't seeing the solutions [they want] from our industry," he said at the VIA forum. "The industry needs to evolve into a US$99 kind of market."

Japanese companies Sony Electronics Co and Nintendo Co, and the US' Microsoft Corp have been successful at selling gaming consoles that cost between US$100 and US$200. These simple devices hook up to any television and allow users to play opponents anywhere in the world via the Internet, offering "hours of entertainment for as little as US$99," Sisto said. "If we can do that, we will see a rebound."