Emerging markets want more value from vendors

Developing countries in Asia offer great potential for PC makers, but companies must offer better value for users if they are to be successful in emerging markets, according to an analyst.

Until recently, developed countries were the main focus of PC companies because these are the markets where people have the disposable income to spend on computers, cell phones and broadband Internet access. Increasingly, companies are also eyeing less-affluent developing markets that nevertheless offer great potential for future growth.

“There’s still a huge underserved portion of the global population that doesn’t have that buying power,” said Bryan Ma, director of personal systems research at IDC Asia-Pacific, speaking at the IDC Directions conference in Singapore.

To date, efforts to spur PC sales in these markets through efforts such as the One Laptop Per Child (OLPC) program and Intel Corp.’s low-cost Community PC have focused on price and system designs able to tolerate the harsh environmental conditions that exist in many developing countries.

While these are important considerations, users in emerging markets also want to see more value from PC vendors, Ma said, citing the success of Nokia Corp.’s 1100 handset, which has been a hit in India because it includes a flashlight — a useful feature in a country that suffers from frequent power outages.

“At the end of the day it’s not the technology or the device, it’s the application people are looking for,” Ma said.

One application that has proven popular in many emerging markets is access to commodity prices, which lets farmers and fishermen know when and where they can get the best prices for their goods. Other popular applications include communications, such as video conferences that allow people to speak face-to-face over the Internet, and access to government services, he said.

Companies that can bring the right products to market in Asia’s developing markets can tap fast-growing markets, Ma said, noting PC markets in Southeast Asia and South Asia, excluding Singapore, will see a compound annual growth rate (CAGR) of 14 percent over the next five years, Ma said.

Growth will be even faster in major markets, such as India, where IDC predicts the CAGR will be 22.2 percent, and Indonesia, where growth will be 23.1 percent. In Vietnam, which has seen a flood of overseas interest and investment in recent months, the CAGR for the PC market will be 19.9 percent, the company predicts.

The companies that profit most from this growth will be the ones that experiment and develop creative products, Ma said, noting that the right products and applications could spur higher growth predictions for the region.

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