The typical reaction of technology companies to-wards the emerging markets has been to suggest for use by Third World countries those products that have reached the end of their useful lifecyclee.g. PCs powered by Intel 386 microprocessors and Microsoft Windows 95. It represents a dismissive view, that investing in R&D to make products targeted at the emerging markets is a non-paying proposition. Technology companies continue to build more products and services that are nice and expensive to serve the First World, where the markets are saturated and the companies have a tough time increasing their top lines. Against such a backdrop comes the refreshing view of Professor Prahalad, that is slowly finding acceptance. New products with amazing price-performance are emerging.
Access to mobile phones can bring economic prosperity to the rural masses. In 2004, GSMA (that represents GSM vendors who serve a billion-plus customers) observed that though GSM coverage reaches nearly 80% of the worlds population, only 20% among them can afford to own a mobile phone. A key element of a mobile phone cost is the cost of the handset itself. To address this, GSMA announced broad specifications of a low-cost (not cheap) mobile handset and requested bids for up to six million handsets at a sub $50 price point. The idea was to seed one percent of the handsets in 2005 through this initiative.
American telecom giant Motorola won the bid in February 2005 and agreed to supply up to six million handsets at $40 during 2005. The handset is a Motorola C114 platform-based handset. After winning the order, Motorola made it amply clear that even at this price
point it was making profit, though small. Emphasising Prahalads view that there is, indeed, fortune at the bottom of the pyramid.
Motorola has made a handset for $40 thats durable, has good voice quality
Infineon says it will make a reference design to help make a $20 handset
Another development that adds to the excitement is the announcement early last month by Infineon (the semiconductor major that was earlier part of Siemens) of a single-chip based reference design, that would translate to a $20 phone. The design includes full phone functionalityphone functions, software for SMS and voice calls, keypad display, charging system, packaging and documentation. It is expected to be licensed to EMS manufacturers for production by early 2006.
The design brings down the electronic components from about 200-plus in current design of basic models to just about 100. And integrates send/receive functions and the processor into a single-chip. The phone would have four hours of talk-time and 10 days of standby, comfortable for most users of basic communication functions.
Finally, there are mobile phones affordable by the common mana true triumph of technology with a human touch, that is sustainable in the long run. IT can be a bright spot for Indias tomorrow!
The writer is director of IIIT, Bangalore. These are his personal views