Emerging markets in BRIC nations are focus of technology firms

October 11th, 2007

Forget everything you know about today’s computer industry.

Future technology growth will be driven by emerging markets rather than Europe, North America or Japan, and consumers in these emerging markets will probably use handheld devices rather than the desktops or laptops that have been our gateways to cyberspace.

That’s a view gaining credence in Silicon Valley, where giant tech companies like Sun Microsystems, Cisco Systems, Hewlett-Packard and Intel are in a constant struggle to find new markets to fuel the wild growth expectations on Wall Street.

Look no further than Sun Microsystems’ Chief Executive Officer Jonathan Schwartz, who preached this view to a small gathering at the company’s Menlo Park headquarters Wednesday.

“If you believe our business is following consumers, you have to be concerned about where the consumers are,” said Schwartz, who thinks the future market for high-tech sales is spelled BRIC, short for Brazil, Russia, India and China, or BRICA when Africa is thrown in.

The gathering Sun organized this week illustrates how U.S. technology firms are being forced to make every aspect of their operations, from manufacturing to sales to hiring, into a global operation, with a particular emphasis on the fast-growing but still comparatively poor developing world.

Gartner market research director Sandy Shen recently noted that with 85 percent of the world’s population living in emerging markets, their purchasing power is on an inexorable rise.

Microsoft, Intel, Hewlett-Packard, IBM and every other technology company of any size or ambition have refocused on these emerging markets, especially the BRIC nations which in many ways - from an economic, social and even military point of view - are the up-and-comers of the 21st century.

Sharing Sun’s vision of how to address this vast but poor market, Schwartz outlined an updated version of that time-honored strategy of giving away the razors to sell the blades. In this case, Sun hopes to push government agencies and private firms in these regions toward the Internet, on the premise that Sun would end up selling them the hardware and software they need to sustain their networks.

Schwartz said that unlike affluent markets, where technology purchases are based on demand for music, games, social networking and other digital distractions, the developing world’s coming wave of electronic purchases will have to be business-based and provide a direct competitive advantage.

For instance, he said, farmers in the developing world could use the Internet to check commodity prices before selling their produce to get the best prices for their wares. And unlike Americans, who have been accessing such comparative information for years via desktop or laptop PCs, the tech user in the BRIC nations would be more likely to use an Internet-enabled cell phone or other handheld device, because they wouldn’t be able to afford the PC or even pay for electricity to power bulkier electronics.

“The most pervasive technology deployed around the world today is a mobile handset,” Schwartz said, arguing that the emerging market is already upon us.

Companies like Nokia, the Finnish cell phone company, have long been expanding into countries like India and China, where regions are plugging into the world wirelessly because they haven’t had the time or cash to run cables.

Schwartz said that as developing nations expand their networks into poor but populous locales, Sun will ultimately benefit as a vendor of server computers, data storage devices and other software and services needed to lubricate these electronic interchanges, but “not in the next quarter or the next few weeks.”

How long it will take to develop meaningful revenue from the BRIC countries, and whether Sun will benefit more than other Bay Area heavyweights like HP or Cisco, remains to be seen. But Sebastian Teunissen, director of the Clausen Center for International Business and Policy at UC Berkeley, said at least Schwartz is on the right track in thinking that his firm has to fine-tune its products for emerging market requirements.

“Technology companies used to believe that one size fits all,” said Teunissen, who was invited to the Sun event. U.S. tech firms have been spoiled, he said, because their domestic markets are so huge that - other than publishing manuals in the local language - they haven’t had to significantly retool their products for overseas sensibilities.

Teunissen, who is more of an expert on trade than technology, said U.S. consumer products companies like Procter & Gamble have long done research into consumer habits overseas. For instance, he said, P&G has studied habits in Japan, where the ritual of hair-washing has more steps than in the United States.

But the Berkeley expert said U.S. tech companies are starting to understand that they have to adjust both their products and their business styles to the realities of doing business in large and ambitious nations that are just starting to come into their own.

For instance, Teunissen noted that after years of haranguing Chinese authorities over illegal copying of its software, Microsoft traded the stick for the carrot by expanding its presence in China. Today it is starting to reap the rewards in the form of agreements with Lenovo Group, the computer-making company in Beijing, to make sure that all its PCs are sold with licensed operating systems.

“That’s huge,” Teunissen said.

E-mail Tom Abate at tabate@sfchronicle.com.

Which BlackBerry Is Juiciest?

October 11th, 2007

The newest products from Research In Motion («www.businessweek.com») seem as alike as two blackberries in a bramble. Both the BlackBerry 8820 from AT&T («www.businessweek.com») and the BlackBerry Curve 8320 from T-Mobile are the first of their breed to include Wi-Fi. But they use it in very different ways. Of the two, the Curve is a more practical choice for most consumers.

Corporations are likely to favor AT&T’s 8820 ($300 after rebate, with a two-year contract), a workhorse in the BlackBerry tradition. It’s not quite all work, since it adds a media player to BlackBerry’s trademark mobile e-mail and contact and calendar sync. But RIM left off other consumer features, such as a camera, that security-minded corporate buyers don’t like.

Think of this product as a platform. It’s just waiting for companies and software makers to customize it to take advantage of capabilities such as a global-positioning-system receiver. Depending on a company’s needs, it could add TeleNav GPS navigation tools or tracking software for managing a fleet of cars or trucks. Still, if a corporate IT department hasn’t enabled specific applications, about the only thing the Wi-Fi is good for is faster Web browsing. And given the device’s small screen and underpowered browser, that’s of limited utility.

The Curve ($249 with contract) comes with all the corporate features of the 8820 except GPS and adds consumer-friendly touches. It’s a bit smaller than the 8820, making it easier to hold, at the price of a slightly cramped keyboard. It has a 2-megapixel camera and, like Apple’s («www.businessweek.com») iPhone, uses a 3.5-millimeter consumer-electronics-style headphone jack rather than the 2.5mm jack used in most handsets. It also works with Bluetooth wireless stereo headphones. It’s All in the Network

The biggest difference between the two BlackBerrys is not the phones but the way the networks they run on use Wi-Fi. The Curve is the first smartphone that works with «www.businessweek.com» (BusinessWeek, 7/19/07). This uses a technology called Unlicensed Mobile Access (UMA) that lets calls move seamlessly among T-Mobile’s regular over-the-air service and Wi-Fi networks; there’s no need to switch networks or use a separate service like Skype. This is especially pleasing in locations, including your home, office, or T-Mobile public hotspots, where you have Wi-Fi but T-Mobile network coverage may be poor. Plus, calls made on Wi-Fi don’t use calling-plan minutes.

The Curve’s bigger bonus: BlackBerry e-mail and contact and calendar updates also move over Wi-Fi—a welcome benefit deep within buildings, where phone coverage tends to vanish.

If only the 8820 did the same tricks on AT&T’s network. The phone can be set up to get corporate mail over Wi-Fi, but only if your IT department has installed special software. Even then you may only get service in your own corporate facilities. An AT&T spokesperson says the company has no plans to offer UMA. T-Mobile’s service options for the Curve make for complicated pricing. Although you can get a smidgen of data service for just $10 a month above the cost of a voice plan, I think most people will go for the $30 plan that includes unlimited messages and browsing. HotSpot @Home service adds $20 to your monthly bill. It includes unlimited domestic voice calls made over Wi-Fi and use of T-Mobile hotspots. AT&T’s BlackBerry service starts at $40 per month in addition to a voice plan.

If you live in an area where T-Mobile service is at least half-decent, the Curve strikes me as the better choice. The camera (which your paranoid employer can always disable) and other features are attractive, but the advantages of T-Mobile’s HotSpot @Home service are the real clincher.

“Street View:” Inventive Or Invasive?

October 11th, 2007

(CBS)You can really just walk down the street in New York, said Dean Burris, a former New Yorker now living in California. He can revisit his old neighborhood anytime he wants with Google’s latest feature: “Street View.”

So this is the house I was brought up in this tree here I planted, he told CBS News science and technology correspondent Daniel Sieberg.

By typing in an address and clicking anywhere highlighted in blue, Burris can even see how times have changed.

Oh look at that! My mother painted the building and there’s no more graffiti there, he said.

Google photographed the streets of five cities New York, San Francisco, Denver, Miami and Las Vegas with a special 360-degree camera mounted on a van.

The snapshots range from amazingly detailed to boringly mundane. It’s a great tool for tourists or home-sick transplants, but privacy advocate Kevin Bankston, a staff attorney at the Electronic Frontier Foundation, said Google is being too invasive.

“There are a lot of people on the Web who are, I think, freaked out by this they find it kind of icky and uncomfortable,” Bankston said. “I don’t think Google has done anything illegal here, but I do think they’ve done something that’s exceptionally rude.”

In a statement, Google says it “takes privacy very seriously” and acts “quickly to remove objectionable imagery.”

But some think it’s like virtual voyeurism.

People assume some level of anonymity as they were walking about the street but now that anonymity has been compromised, Bankston said.

But “Street View” does provide an oddly compelling snapshot of Americana. The resolution is clearest in San Francisco where you can peer in a sleeping man’s window, see an apparently angry woman on her cell phone, watch a man appear to scale a building, or get a glimpse of undergarments and sunbathers. All frozen in time.

Google happened to shoot a group of people in front of the CBS studios that may not be updated for months or years. But along with more immediate technology like video in cell phones and surveillance cameras, it’s clear we have to re-examine privacy in a whole new way.