Microsoft and Intel have backed a new pay-as-you-compute program to get PCs into the hands of more people in developing countries in Latin America and Asia. They say their approach to those untapped markets could be more successful than a low-cost laptop program funded by competitors and Massachusetts Institute of Technology professor Nicholas Negroponte.
The companies will disclose Monday the beginning of a second trial with several thousand consumers in Brazil of a program that lets people buy a PC at retail for about half its usual cost, then pay off the balance through hourly usage fees. The goal of the program is to expand the PC market in countries where many consumers have low incomes and difficult access to credit. Microsoft has run an initial trial in Brazil for the past year and plans to expand the program to China, India, Mexico, and Russia in the coming months.
Under the program, called "FlexGo," a PC running Windows XP with a 17-inch monitor that normally sells for $600 would be sold for between $250 and $350, with 10 hours of usage time included. Prepaid cards available at stores would buy additional time for about 75 cents per hour, according to Mike Wickstrand, a director in Microsoft's market expansion group. Once time expires, the PC enters a special limited mode and eventually locks up, unless the user purchases more time.
Consumers in developing countries want a full-featured PC like the ones they use in schools and Internet cafes, Wickstrand says. "The person isn't making sacrifices."
Next year, MIT Media Lab founder Nicholas Negroponte plans to start distributing a $100 laptop in countries including China, India, Brazil, and Thailand. The bright green machines feature a small, 8-inch screen and a hand crank for generating power where there's no electrical grid. Google, Red Hat, and Advanced Micro Devices have each invested $2 million in the program, called One Laptop Per Child. Prototypes of the machines use a monochromatic display for word processing and switch to lower-resolution color for Web surfing.