Intel data shows laptops getting more affordable in emerging markets
By Darren Quick
September 13, 2011
It wasn't that long ago that putting aside enough cash for a laptop would entail an extended period of penny pinching for most people. As is the nature of technological change, as the years have gone by the computing power of the average laptop has increased while their size and cost has decreased. Data released by Intel at its 2011 Investor Meeting shows just how much more affordable the average laptop is these days for people in various parts of the world.
While it's no surprise that laptop prices have steadily decreased in most developed countries, the biggest changes can be seen in emerging markets such as China and India. This is due not only to reductions in the price of such technology, but also to an emerging middle class enjoying bigger pay packets.
According to the Intel data, in 1995 the worldwide average number of weeks income required to buy an average priced consumer notebook PC was 25.7. Japan was lowest with just 3.3 weeks, followed by 4.9 weeks in North America, 5.6 in Western Europe and 8.5 in established APAC (Asia Pacific Asia China) countries. We then see a big jump to 41.1 weeks in Latin America, 47.7 weeks in Eastern Europe, 74.7 in META countries (Middle East, Turkey, Africa), 125.9 in emerging APAC countries, 174.7 in China and a whopping 440.5 weeks (that's 8.5 years) in India.
By 2010 the worldwide average had reduced to 4.2 weeks and North America had taken the title of least amount of weeks at 0.8. This was followed by Western Europe at 0.9, Japan at 1.2 and established APAC countries at 1.5. But the gap between these and the other countries had narrowed considerably with Eastern Europe now down to 5 weeks, Latin America down to 6.5 and emerging APAC countries down to 16.6 weeks.
However the biggest drop was seen in China and India, where the number of weeks of average income in 2010 was 7.1 and a still relatively high 30.8, respectively. With China and India's population alone adding up more than 2.5 billion in 2010 according to the EIU, emerging markets now account for more than 50 percent of Intel's revenues, says Stacy Smith, Intel's chief financial officer.
"It comes down to a simple economic equation," Smith told China's CCTV. "[Technology] is very desirable and important in people's lives in emerging markets and the affordability of that technology has moved to a point where there are billions of people who can afford the technology."
Intel anticipates that the downward trend will continue and Smith estimates that approximately two out of every three PCs sold will be in emerging markets by 2014, and that nearly two out of every three PCs will be sold into the consumer segment. Additionally, Smith estimates that roughly two out of every three PCs sold will be laptops.
Intel also expects the upward trend in wages and downward trend in prices to provide new growth opportunities for PC manufacturers even amidst the growth of tablets, which it says are often priced beyond the reach of many consumers outside the U.S. Although it's hard to see how tablets wouldn't follow the same pattern as laptops in the coming years.