Does Low Cost Mean Low Quality?
That’s often the initial response when people hear of the $30 cell phone that Motorola is building for emerging markets. Or the $185 internet access device (a PC, except that you can?t load new software on it) that AMD is shipping to India and the Caribbean. Or a nifty little home water purifier that can supply a family’s needs for $10 a year (to be launched in India this summer).
But when the product or service is designed to meet the real needs and circumstances of bottom-of-the-pyramid (BOP) communities, low price can also mean superior quality. An affordable basic GSM cell phone (with text-messaging) is what most individual BOP customers need. The AMD device not only boots quickly, but is intended to have much lower support costs than a normal PC?a critical feature in communities where technical talent is scare. And the water purifier? It’s based around a new, nanotechnology filter that has passed US EPA and California quality standards and will remove bacteria and viruses that pass right through the Brita filter in your refrigerator?its better and it needs to be, for the billion + people without safe drinking water. More about these examples in my next post, but I think we?re seeing the beginnings of a wave of sophisticated technology built into products designed explicitly for low-income markets, and that will provide superior quality at very low prices.
See the Red Herring article examining Motorola’s low cost handset strategy.