by AJ Musial
As the tech market is commoditized in the U.S. , the anti-inflationary trend of these products will continue in the future. For this reason, industry juggernauts such as AMD , Cisco, Google, IBM , Intel, Microsoft, Motorola, Nokia, and Sun have focused efforts on the recent opportunities in developing nations. These companies are looking to grow, and what better target than untapped countries holding half the world’s population? By offering the poor tools that will increase their earning power, they will be able to earn more money and, in turn, pay companies for more technology usage.
According to David Kirkpatrick, Fortune senior editor, “I recently asked Paul Mountford, Cisco’s head of emerging markets, if there were any new countries he had encountered that were aiming to use IT to speed up growth in the way that Korea , Taiwan and Singapore have done in recent decades. He said the first country that came to his mind was Libya .”
With the advent of wireless technology, cell phones have become the most important connection tool in developing countries. With the globe connected on a wireless basis and the production of inexpensive cell phones and computers like the Motophone produced by Motorola which will sell for around $30, and the XO laptop, designed by Nicholas Negroponte, which is to sell for $100, people in developing countries should have the resources necessary to educate themselves and generate a higher standard of living. Tech companies are hoping this higher standard of living will be tied to the purchase of their new products. Motorola has calculated that about 80% of the world’s population currently lives in an area covered by wireless networks. The idea is brilliant: an estimated 1.5 billion cell phones in use in the developing world, a number that is expected to double in the next five years. India alone boasts five million new cell phone customers every week. As the price of technology use falls and the number of individuals who want, need and can afford the available technology increases every day. This ever-increasing overlap is the mouth-watering reason that Fortune 500 company executives are scrambling to prepare marketing efforts for developing nations.
The business strategist C.K. Prahalad has noted the fortune available at the bottom of the pyramid, and I couldn’t agree more. It is no secret that our dollar goes further because of developing nations, but these countries are no longer being viewed as just sources of cost reduction, but as enormous virgin markets, as well. Before companies can tilt the international brand loyalty scale in their favor, they will have to build such a scale first, because most of the developing countries are free of any legacy system and are without an installed base to build upon. With the tech industry preparing to extract profits through volume sales instead of margins, global economic expansion will snowball for the next ten years as companies race to get their foot in the door of developing countries. It will be interesting to see how to world reacts as the technology focus is shifted away from the United States .
Inevitable change is brewing across the globe, and those individuals and companies who embrace the change will experience far greater success than those who fight it. With technology shifting from a rich-man’s luxury to an every-man’s right, corporate dollars will be slowly pulled from appeasing promotional acts and reallocated to exposing the uninformed. The question is: is America too pompous to embrace this fortuitous opportunity? Hopefully not, because the doors that this opportunity could open are limitless.
Source: David Kirkpatrick, Fortune senior editor