Pay-as-you-go computers in Brazil
I’ve decided to come clean and admit it. I hope Brazil wins its sixth World Cup. So for those of you cheering for the Ghanas and Ecuadors of the world, you will find little solace in this post, which extols the virtues of corporate superpower, Microsoft, and its latest business venture in Brazil. These days, being a Brazil fan and a corporate cheerleader is difficult, especially at an environmental organization where everyone fights for the little guy. But hey, look on the bright side, I could be praising Apple and its latest gismo to be unveiled in Cupertino.
So here’s the scoop: Working in conjunction with Magazine Luiza, one of Brazil’s largest retailers, Microsoft has launched a program called FlexGo, which is a pay-as-you-go plan for purchasing personal computers. The plan is modeled on the cell phone industry’s pay-as-you-go plan, which has brought even the most low income consumers into the cellular market. Here’s how the plan works: A consumer pays a portion of the computer’s upfront cost and is able to bring it home. By purchasing prepaid cards like those used for cell phones, she can pay off the remaining balance. The computers are outfitted with software that disables their use once the allotted time on the card expires. After she has purchased enough cards and the computer is completely paid off, it is hers to keep. The obvious benefit of FlexGo is that it lowers the initial price of buying a computer, allowing low income consumers to tap into the market.
In a news release posted on his company’s website, Frederico Trajano, director of Magazine Luiza’s Sales and Marketing division, explained his company’s goal of targeting the BOP. ?We wanted to democratize the use of technology by increasing the digital inclusion of the country. To do this, we worked in two fields, the economic; with development of products and more accessible ways of financing; and the cultural, creating training and educational programs for the low income, which are today the principle clientele of Magazine Luiza.?
On Microsoft’s website you can find a similar press release masquerading as journalism, which has a self-congratulatory description of FlexGo. But buyer beware; in their news releases, both Magazine Luiza and Microsoft fail to mention that the total cost of owning a computer under FlexGo is significantly higher than if it were bought outright. Yet this is hardly surprising considering that the FlexGo program is the equivalent of a small loan.
Now that Microsoft’s pilot program has succeeded?at least from a business perspective?it will be expanded into other developing countries. Yet we must keep in mind that computers are not goods in themselves. That is, the success of FlexGo and other programs like the $100 dollar laptop will not be measured in terms of the number of people who own computers, but the extent to which these computers actually improve people’s lives.