Intel, AMD push wide web access with cheap PCs
Tuesday, May 2, 2006
Two of Silicon Valley’s biggest technology rivals will promote initiatives this week to grow their global business by providing low-cost computers to developing countries.
Intel is announcing it will spend $1 billion to speed up the marketing of inexpensive computers to such emerging markets as such as India, China and Mexico. Its rival, Advanced Micro Devices, is already making bare-bones computers that cost $250 or less.
While tech companies agree about the importance of bringing technology to the world’s poor, they differ about the best way to do it. But they are joining top executives from Microsoft and Dell this week at a conference in Austin, Texas, to discuss campaigns to extend computer access to the world’s low-income regions.
“Decades of providing technology in growing volume and at decreasing costs have driven great gains for developing nations, communities and people worldwide, but there is still much to do,” said Intel CEO Paul Otellini in a statement about the company’s “World Ahead” program. Many tech companies have marketed conventional PCs that failed in the emerging markets. With that in mind, Intel plans a broader approach: customizing PCs for specific world regions, making high-speed wireless Internet connections available to everyone, and educating teachers on how to teach with computers. Intel also has a new design for a classroom computer, costing about $450, that will make its debut next year. Bill Calder, a spokesman for Santa Clara-based Intel, said, “This is not just a charitable thing. It makes good business sense.”
But philanthropic aims can also pose risks for business strategies. “The tough problem is that a lot of the companies want to hit the low prices for the emerging markets, but they don’t want to cannibalize sales of the high-priced machines for developed countries,’’ said Rob Enderle, an analyst at the Enderle Group in San Jose. “The truth is, there are two markets in each country. There are the affluent people who will buy the full-fledged computer, and those in rural areas who need the cheapest possible machine.’’
The debate over how to best reach developing countries also plays out in the efforts of Silicon Valley chip makers Intel and AMD. Intel backs the view that the poor should have access to fully functional computers that might cost slightly more but give them rich experiences on par with everyone else. That aim aligns with the business aims of companies promoting both Windows software and Intel’s microprocessors. AMD, by contrast, has focused on even cheaper computers and launched an effort it calls 50×15 to get 50 percent of the world’s population using computers by the year 2015. AMD has already introduced computers priced at less than $300 — or subsidized through monthly subscription fees — and run only a subset of Windows software.