November 3, 2005 4:00 AM PST

Brazil's bumpy road to the low-cost PC

It was an idea everyone loved: Develop a cheap PC that would let large numbers of Brazilians connect to the Internet. Literacy would rise, the economy would improve and the country's emerging tech sector would get a boost.

Unfortunately, it's been about six years and counting.

From 1999 to the present, the Brazilian government has made several attempts to foster cheap computers for the masses, but the efforts have foundered in a sea of red tape, political infighting, hardware issues and pricing that's still out of reach for many.


What's new:
Brazil is trying yet another program to get low-cost PCs into the hands of its citizens.

Bottom line:
The latest initiative seems as likely to fall by the wayside as earlier efforts, and that doesn't augur well for similar plans in other countries.

More stories on low-cost PCs

The latest incarnation, a program called "Computer for Everyone," unveiled in March by President Luiz Inacio Lula da Silva, aimed to sidestep some of the problems of past programs, but so far it's garnered little support from manufacturers or consumers.

"When it comes to (bringing) computers to the poor, Brazil makes a soap opera of it," said Rogerio Goncalves, a telecommunications specialist and Webmaster in Rio de Janeiro. "Every single project of digital inclusion, from the very first one until now, has never left the desk."

Brazil's experience will likely also serve as a sobering example for others in the process of launching their own programs for burgeoning populations in emerging markets. Currently, efforts are under way to bring $100 computers to the masses in India, the Caribbean and Africa. Meanwhile, Nicholas Negroponte and the Media Lab at MIT of which is he is a co-founder, have plans for widespread deployment in developing nations of a windup-powered laptop targeted at children.

India's first cheap computer, the Simputer, stumbled because of inadequate technology. Sources in India have also said that the Personal Internet Communicator, a more sophisticated device launched by Advanced Micro Devices last year, has yet to gain much momentum. The PIC has recently debuted in a few cities in Brazil.

On the software side, Microsoft has begun offering low-cost, stripped-down versions of Windows XP to fight back against both software piracy and incursions by open-source software.

Like mainland Asia a few years ago, Latin America is an exploding but difficult market. In the third quarter, PC shipments grew by 22 percent in the region, one of the fastest paces in the world, according to market researcher Gartner. The growth in part came from declining prices, consumer spending and a government-sponsored initiative in relatively prosperous Chile.

$100 laptop

Market research firm IDC expects Brazilians to buy 5.2 millions computers this year, a 28 percent rise from 2004.

PC penetration, however, remains low compared to the overall population, and part of the reason is price. The average person simply doesn't have a sufficient level of disposable income. Minimum wage adds up to around $120 a month.

The problem is compounded in Brazil because of shipping costs and a host of taxes, which can make PCs in Brazil more expensive than those in developed nations. A PC with a 1.5GHz processor, 128MB of memory, a 40GB drive and a 15-inch monitor might go for $600. In the U.S., vendors flog similar PCs, sometimes with dial-up access, for $450 or less after rebates.

Although the Brazilian government began to champion widespread PC use in 1999, the first official program was the "Popular PC" campaign of 2001.

The Popular PC was supposed to be a $250 box. To get around Brazil's high import taxes, many of the components were going to be made domestically. Researchers from the Federal University of Minas Gerais presented a prototype with a flash drive instead of a hard drive, no CD-ROM and no floppy. The prototype proved unworkable and government support for further research fizzled.

CONTINUED: Problems with pricing…
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Add your comment
Got and extra 2 grand?
I am currently in Brazil (though from the US), and purchased a
PC here last year. I paid over US$500 for a bare-bones PC with
XP, and some other software. Its frustrating to people who live
here to afford computers. To a middle-class family, even, this
price is like plopping down US$2000 for something.
There is plenty of free internet access as well, but the phone is
charged by the minute here, so to stay on the internet for very
long is not practical. DSL is also available, but out of reach for
most people cost-wise.
As an example of how the tarrif system works here, I was
looking at a digital camera the other day; the price was double
the MSRP for the US (presumably) because of the import taxes.
Oh, and that copy of WXP? I found out it was pirated recently.
Posted by Klar (4 comments )
Reply Link Flag
"DSL is also available...
... but out of reach for most people cost-wise". Haven't the Brazillians heard of Cable and Wireless Internet Technologies that can also be employed to enhance and enable their internet experiences! The introduction of "competing" technologies would certainly force the cost of internet "connectivity" southwards and make the experiences of the Brazillians more affordable.... don't you think!
Posted by Captain_Spock (894 comments )
Link Flag
Brazillian State Agencies...
... and the Brazillian business communities in general should also get on board the Open Document Standards IT (Information Technology) Train like the possible formation of 'OpenDocument Foundation'; see link to CNET article ( <a class="jive-link-external" href="" target="_newWindow"></a> that would allow for the adoption of OpenDocument Computing Standards to which the overall Brazillian economy will not be subjected to "lock-ins" by large multi-national computer software companies like SAP and Microsoft!
Posted by Captain_Spock (894 comments )
Reply Link Flag
cheap pcs for third world contrys
i think your going about this all wrong why not collect all the used corpration computers all over the world and send them to these contrys where they cant afford new ones !!! and have internet over the power lines ??????
Posted by linuxuser. (1 comment )
Reply Link Flag
why take the leftovers
a second hand usable PC in developed nation would still cost
around USD 200 and have all the maintenance and spare
unavailability/incompatibility headaches. And if you take the ones
the corporations discard they would not be able to use even most
of the basic software at decent functional levels. Its the government
attitude that needs a paradigm shift, if they really mean " computer
for everyone".
Posted by Deven Shah (2 comments )
Link Flag
Governments need do'ers
like us in india, brazil needs their politicians to take action
rather than just keep creating hype and getting on the news
Fortunately for us we had some of our key politicians who did
rather than talked. They started the rumblings in the late
eighties and it took us 15 years to reach here. Here where now a
basic usable PC is available for just under 350USD. Cheaper
browser PC's are available for just under USD 250. If the
government is serious just reduce the taxes and import duties to
zero overnight. I am sure the brazilian economy could survive
the little that they would lose from this. In time, i.e 3 - 5 years
the seeding and mass movement would happen and then they
could relook at the taxes. Once the PC's start moving in fast at
the prices above, access to the net at competitive rates/speeds
would automatically follow. Ford built the first car and the world
got higher quality gasoline. Then one would be able to really say
the revolution has begun.
Posted by Deven Shah (2 comments )
Reply Link Flag
"Brazil's bumpy road....
... to the low-cost PCs" could become smooth as a result of activities and follow-up actions ( which should include a sound Regional Information Technology (IT) Policy) now being undertaken by the "Initiative for Integration of Regional Infrastructure of South America (IIRSA)"; see link:
<a class="jive-link-external" href="" target="_newWindow"></a>
Posted by Captain_Spock (894 comments )
Reply Link Flag

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