Netbooks and other CULV products

I purchased a Lenovo Ideapad S10 netbook a few months ago, so naturally I follow news about upcoming products in this space, and in general related to other computing platforms where the total cost of ownership (including electricity usage) is less compared to others.
It is mostly thought that power efficiency is mostly relevant for data-centers of large corporations, but there is bound to be increased focus into these CULV (consumer ultra low voltage) platforms as more and more consumers become more cautious about their spending habits or are concerned about the environment.

Looks like Acer is coming up with another winner later this month - Acer Aspire One with a 12 inch display. People like me who have already tasted netbooks would be very interested in the new line-up of 12 inch netbooks. The 10 inch ones can be passed on to the kids for school work etc, while the adults can move on to better things. :-)

Also, checkout the HP Pavilion dv2 and the superslim MSI X340 also if you are planning to replace your old heavy laptop.

The future of computing

I was reading the article on Beyond the Blackberry crowd: life in a post-32nm world and found something there that felt really important to me.

“The vast bulk of the history of computing up until the present day has been about moving semiconductors from the server room to the business desktop, then from the business desktop to the first class cabin, and then from first class into coach. At this point, everyone who can afford a cheap plane ticket or a pair of Nikes is already wired to the gills with transistors, and the major bottlenecks in getting those folks to buy even more of them are mostly out of Intel's control (i.e., screen size/quality, battery life, connectivity, usability).

To see real growth in the coming decades, Intel, AMD, and the rest of the semiconductor industry must focus on markets where an iPhone would cost a month's income, and then on markets where it would cost a year's income.

So when you're trying to imagine how the computing industry will look in ten to fifteen years, you have to forget about the Blackberry almost entirely. The bulk of the market will shift from those people, who will remain a very profitable niche, to consist of people who aren't currently all that wired.”

It must be quite confusing to think of a computing paradigm for people whose annual income may be less than the cost of an iPhone (i.e. US$ 400). How much can such a person save, and what can be his/her need for a computing device? Tough questions!

Let us try to answer these in the Indian context. In India, US$ 400 equals about Rs 16,000 @ Rs 40 per US dollar. In most cities in India having population of over a million, it is very uncommon for someone to be earning at this rate.

So who are we talking about? We are talking about the people living in rural areas. It may come as a surprise to some of you that 70% of India’s population still lives in rural areas. Also, according to December 2007 statistics, the teledensity (number of phones per 100 people) for urban areas is 25, whereas for it is an abysmal 2 (two) for rural areas.

In rural-India, where the predominant occupation is agriculture related, a farm laborer is able to find employment for not more than 20 days each month, earning perhaps Rs 65 per day. At this rate, he cannot earn more than US $400 in an entire year. Is there a need for this person to be connected? What can he/she gain from having access to a computing platform/device?

At the outset, we can clearly see that this person may not be employed throughout the year. He must have a need to find alternative employment during other days of the month. How can he search for employment? What resource he/she has and how can he advertise his services when he is available? Similarly, numerous inefficiencies exist in all stages of economy, where destabilizing forces (such as connectivity) can create immense new opportunities.

It is a well researched that a cellphone with radio-receiver and LED torchlight is a killer combination. In fact such a phone can be conceived for Rs 1000 or less. The only catch is that it may have to be subsidized to some extent till we achieve scale of economies. This subsidization can be done by the Government (in form of waiver of taxes) or by the Service Providers.

If and when enough of such people are connected, then there is no stopping them from reaping the fruits of increased connectivity. We will witness emergence of new paradigms in social networking and the overall pace of development would augment the combined incomes by a factor far greater than the cost of this computing infrastructure.

Let us compute the scale of opportunity. If we were to consider a point in future when the teledensity of rural-India would be equal to that of urban-India currently, then it has to go from 2 to 25. This is 23% of rural population of roughly 700 million, or 161 million. If all the telecom service providers combined together can add a million new rural subscribers each month, even then it would take more than 13 years to achieve this target!

In order to achieve a rural-India subscriber base of about 150 million cellphone users, over the next 13 years, we may need a supply of about 300 million phones (to account for replacements, etc). Even at a modest US $20 per instrument, it is a whopping US $ 6 Billion market. Add another 10 to 20 dollars per annum service revenue for the 150 million subscriber base, and we are talking about US $ 2 billion in annual revenues alone.

But why stop at cellphones. The way we saw rural India going from radio receivers to black-and-white TVs, while the urban India went from B&W TVs to DVD Players and color TVs, similarly the rural-landscape will undergo a similar transformation and I would not be surprised to find computers with 1 GHz processing capability commonplace in rural-India in the next ten years. Of course urban India would have moved on to much better things by then, but we are not doing any demographic comparisons here. This discussion is to merely establish that the additional demand for computing in the next decade would have significant contribution from meeting the needs of the populace that earns less than the price of an iPhone in an entire year.