Microsoft pushes for PCs in poorer nations

By SHIHOKO GOTO, UPI Senior Business Correspondent  |  May 22, 2006 at 2:18 PM
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WASHINGTON, May 22 (UPI) -- They're becoming more powerful and cheaper each year, but for many in poorer countries, personal computers remain an unaffordable luxury.

Yet making it easier for middle-income earners in emerging markets may well be not only a sound business plan for computer manufacturers, but also an effective way of raising the general income levels of those countries in the long run.

On Sunday, computer software giant Microsoft announced that it will allow customers in Brazil, China, Hungary, India, Mexico, Russia, Slovenia, and Vietnam to have the choice of opting for the pay-as-you-go financing plan, which will allow them to pay for Lenovo computers installed with Microsoft software in instalments.

Specifically, the FlexGo system allows clients to purchase a computer as they might a cell phone, enabling them to pay for their PC as they use it through the purchase of prepaid cards, much as they might for the use of cellular phones. They would therefore pay for a fraction of the machine's price initially, and pay off the remaining balance by purchasing prepaid cards that activate the computer for a defined amount of time. Once that time runs out, the PC can be used on a limited basis until additional time is added. If the customers pays off the balance, then the metering technology is deactivated and the consumer will be able own the PC outright.

"Offering unprecedented flexibility of PC ownership will bring high-quality personal computers within the reach of hundreds of millions of families and small businesses in emerging markets so they too can enjoy the many benefits PCs bring in education, entertainment, communication and productivity," argued Will Poole, senior vice president of the market expansion group at Microsoft. He added that "technology is increasingly becoming the determining factor for economic success. We want to put that technology into the hands of users in emerging markets, and watch their potential bloom."

The company is hoping that the new payment plan will encourage more people to buy computers, just as the system worked to encourage cell phone usage in poorer countries. According to research groups Strategy Analytics and Gartner, about 72 percent of cell phone users in emerging markets pay for their services by a prepaid card system.

Meanwhile, other companies are banding together with the software group to promote the purchasing system including PC manufacturer Lenovo and the World Bank Group, as well as other corporations such as Advanced Micro Devices, Infineon Technologies, Intel, and HSBC Bank.

"The innovation behind this initiative will help more people in emerging markets like China and India have access to Lenovo PCs and the ability to explore, experiment and take advantage of all the Internet has to offer," said Philippe Davy, vice president of strategic alliances at Lenovo.

Lars Thunell, the executive vice president of the International Finance Corporation which is the private sector arm of the World Bank, said that "by making access to personal computers and computing resources more affordable for lower-income individuals, Microsoft's innovative pay-as-you-go computing model can help to bridge the digital divide in emerging markets. Pay-as-you-go computing has the potential to be replicated in a number of emerging economies and we look forward to exploring these opportunities with Microsoft."

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