July 31, 2005 9:00 PM PDT

Intel opens design centers for developing world

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Intel will open up four design centers to tackle the some of the hurdles facing computer adoption in emerging markets: cost, dirt, bad weather and intermittent electricity.

Located in Bangalore, India; Cairo, Egypt; Sao Paulo, Brazil; and Shanghai, China, the four so-called definition centers will examine local conditions and economies and then try to design PCs, components and software for the people who live there. In China and Brazil, for instance, Intel has released software that makes it easier to manage PCs in Internet cafes.

Intel India, meanwhile, is working on PCs that are more impervious to dust and can run on car batteries.

"More than 70 percent of our revenue comes from outside the U.S.," said Bill Siu, vice president and general manager of the Channel Platform Group. "Some of this is re-exported (back into the United States) but even if you take this out, the consumption rate is increasing outside the U.S."

Although Intel does not sell PCs under its own name, it is increasingly taking on a larger role in computer and component design. In these centers, Intel will develop blueprints and prototypes for subsystems, even complete with integrated software. Designs and concepts developed in the centers will then be licensed or passed on to computer manufacturers who, in turn, build their systems out of Intel components.

China's Founder PC, for example, will market a home computer in China that's designed by Intel and comes with software for practicing Chinese characters and partitions to prevent children from venturing into forbidden areas on the Net. Ideas developed in one region will, when relevant, migrate to other regions.

In the past few years, the emerging markets have been the place to be. Latin America, Russia and India are some of the fastest-growing technology markets in the world, primarily because few exist there now. In India, only 14 PCs exist for every 1,000 people. Unfortunately, per capita income on average is also far lower in most of these nations, so lowering costs is a key part of the strategies of all these companies.

In January, Intel formed the Channel Group, to specifically target these markets. Based in Shanghai, it is Intel's first, and only, major product to be based overseas.

For the past few years, Intel has been looking at ways to come out with low-cost components for these markets. But the company is quick to add that it will take more than cheap parts to attract the next 5 billion consumers. To this end, the company has retained a number of anthropologists and demographers to help it understand local usage patterns and demand.

 

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