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.

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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.

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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.

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.

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