Emerging market telcos have a surprising new tool to spark demand for data: the PC.
Silicon Valley startup Endless Computing has partnered with Latin American operators to sell low-cost PCs to consumers who've never owned one. It has just launched in Brazil and is about to roll out in Mexico, Guatemala and El Salvador.
CEO Matt Dalio says the company is taking aim at a global market of the "three to five to billion people who live between poverty and having a computer."
He says PC sales are declining because it is a mature market with a longer replacement cycle. It hasn't dropped further because of the number of first-time buyers, indicating continued fresh demand.
"People mistake the PC industry being in trouble for the PC being in trouble," he said. "There are more PC users than ever."
Meanwhile, the smartphone business is flattening out. Gartner Inc. is forecasting growth this year of just 7%, the first time it's fallen below 10%.
Despite the success of smartphones, the PC is still the primary device for going online, including for young people. "Youth use PCs more than their phones," Dali says.
In emerging markets smartphones are much more affordable, but the real barrier to PC adoption is the cost of connectivity.
Two figures tell the story. "For smartphone users, the average data consumption is 300 MB [per month]. For PC users it's… around 60 GB."
That's an indication of how much data smartphone users can afford, Dalio suggests.
Endless's idea is to create a friendly Linux-based operating system that it provides free both to users and hardware firms. It bundles this with as much as 16GB of free apps and content, including education and health apps, office programs and Wikipedia.
With its operator partners it sells a CPU-based device that uses a TV as a monitor. Dalio says the idea came to him while in India, watching a movie on his smartphone while his TV set stood silent in the corner.
Endless is working with América Móvil S.A. de C.V. subsidiaries Teléfonos de México (Telmex) and Telcel in Latin America and is eyeing deals with Asian operators. It is next targeting China and southeast Asia, with a China launch planned for later this year.
Dalio says it's a simple proposition for telecom operators. "They get a better return on their existing assets and that can help fund network growth."
Endless, which raised $23 million in its second funding round last year, has 95 staff and five offices.
Dalio says the business model is around the products and services on top of platforms, rather than device sales.
— Robert Clark, contributing editor, special to Light Reading