May 19 2008 / by Alvis
Category: Economics Year: 2009 Rating: 9 Hot
With the
rapid rise of the iPhone and Microsoft’s
announcement that it will back the One Laptop per Child initiative, a massive
battle for the African computer market may be shaping up sooner
than expected. 
The
AP reports a new deal between Apple and cell provider
Orange that
will bring the iPhone to “Austria, Belgium, the Dominican Republic,
Egypt, Jordan, Poland, Portugal, Romania, Slovakia, Switzerland
and African markets later this year.”
At the same time,
Microsoft has finally agreed to provide Windows to the now
promising OLPC initiative after years
of ridiculing the then far-fetched project.
Though the iPhone presently costs more than a OLPC PC, $399 vs. $100, that price is due to sharply
drop (perhaps to the $100 -$200 range) with the imminent release of
the new 3G iPhone, which itself may be priced at just $199 if
rumors
about a hefty AT&T subsidy prove correct.
While lack of comm infrastructure and politics will certainly
remain the primary barriers to diffusion, it looks as though these
low-cost yet high-value products, driven by large companies getting
accustomed to rapidly exploding markets in which first-mover
advantage is critical, may catalyze a perfect storm for
connectivity in under-developed nations, most notably African
countries. (cont.)
Just imagine the iPhone or the OLPC-PC
subsidies that could be put up by actors like the UN, philanthropic
organizations including Google.org or the Bill and Melinda
Gates Foundation looking to make a difference and advance
corporate interests, private philanthropists interested in
big-leverage plays, international development agencies like
IMF or The World Bank , other nations with
vested or security interests, the governments of the developing
nations themselves, distributed web-based coalitions, and so forth.
With several billion un-connected humans (1 billion in Africa
alone) just waiting to link to the web, the financial, functional,
and cognitive potential is too obvious to ignore.
Furthermore, as large-scale corporate philanthropy and market
development begins to lay a foundation of connectivity, it’s
probable that smaller web-based businesses will quickly innovate
strategies to identify and cultivate value. IMO, such a distributed computational attack, in
which most ideas will fail but many will flourish, seems to be just
what the doctored ordered as this will most effectively infuse
capital, culture and knowledge at the lowest possible cost.
As the effectiveness of market-based philanthropy in Africa
increases over the next several years, it will be boosted by new
innovations like better WiMax,
Walking Hotspots , evolving social media software, rapid
language translation software, faster computer chips, evolving
intuitive virtual worlds, a higher resolution Google Earth, etc x 10.
In turn, the reporting of successful (on a variety of levels)
African projects and ventures will fuel a culture more likely to
appreciate the value of and support For-Profit
Development in the region. Ideally, people will begin to
understand that it is in their interests (short-term as well as
long) to apply the technologies made possible by accelerating
change to grow the pie (which could of course open a Pandora’s Box
of disruptive possibilities). But that’s still a few years off.
Barring any surprise competitors, it appears Apple and Microsoft
will be left to build the initial digital inroads as they race to
solidify product market share. My hunch is that Apple will dominate
this battle due to the iPhone’s 1) more basic and intuitive
interface, 2) lower power requirements, 3) multi-functionality, 4)
greater stability (see
this vision of a Windows powered OLPC-PC might look like), 5) portability, and 6)
development platform.
Microsoft appears to have seriously misjudged the computational
and consumer potential of smaller devices like the iPhone and will
pay the price as Africans leapfrog over the problematic Windows OS
to adopt smaller more effective devices. My bet is the company will
need to develop or back then deploy an affordable 3G cell-phone to
put up any serious fight for market share.
And what about Google, that other 500 lb. gorilla in the room?
However things turn out between Microsoft and Apple, Google, both a
long-term supporter of OLPC and a major
iPhone developer, will win because it is positioned to add
tremendous value (through search, Google Earth, language
translation, gmail, new social networks, etc.) and to grow the pie.
Already making major
moves on the continent, Google appears poised and eager to
capitalize as African brains hop online.
As far as the rest of us, if things go smoothly it looks as
though we all might win. Hopefully that’s a trend that will
manifest and strengthen as we embark on our collective voyage
through the curve.
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