The Sunjay Times

This post consists of my “value-added” thoughts on David Kirkpatrick’s article on Fortune here.

Since I love all things technology and passionately believe that it wields the power to change the world, these numbers are just plain interesting to me. I’ve overlayed on the data some general technology trends on Web 2.0 startups, venture capital, microfinance and poverty, all cleverly slapped into one big fat blog post. Why? Because they’re all inter-connected, and I haven’t written anything all this week (been so darn busy lately!) Off we go.

Indonesia:
- 1 in 100 owns a PC
- 1 in 1,000 has broadband Internet
- 63 million cell phone subscribers, representing 27% of the population (of 234 million)
- Annual cell phone subscription growth rate: 36%

India:
- 166 million cell phone users
- Last year’s cell phone subscription growth rate was 84.5%

Switzerland:
- The Swiss have 85.1 PCs per 100 persons, beating the United States at 80.3 PCs per 100 persons

Global PC penetration is 12.9 for every 100 people. Room for growth? You bet. Many of PC owners are obviously in well developed countries, and not poor countries with lots of people. OLPC‘s efforts to reach the billions at the BoP will move the needle here, if they succeed. Not forgetting the “middle” market, more of those who are neither rich nor poor will also buy computers and get on the internet. (Better start loading up on some PC stocks!) But wait, am I sure that the middle-class is not going to get poorer and not buy computers? Well the stats from Hans Rosling’s TED talk show that the overall trend here is that the world is slowly digging itself out of poverty, and I take comfort in that. Actually, read on below as I describe another trend that supports that.

Now, for some cell phone stats:

United States:
- 77.4 subscribers per 100 people
- Everywhere in Europe (except Turkey) exceeds penetration in US. Italy is at a whopping 135.1 cellphone subscribers per 100 persons.
- Hong Kong beats the US in penetration too, at 135.3

The global average is 41.6 per 100 people.

Cellphone usage growth in fast growing markets last year*:
- Peru: 57%
- Vietnam: 114%
- Pakistan: 170%
- Ukraine: 185%

*numbers might be fuzzy, but they show a general trend

What’s also important to note about this upward trend in adoption is that mobile phones were the crucial piece that first enabled the poor in Bangladesh to get out of poverty (see section on Village Phone). Women built business models around it and turned it into a source of income. These days, mobile phones are also playing another role in microfinance: enabling the transfer of money and information over, well, mobile phones! In poor countries, a brick-and-mortar bank branches with ATMs are hard to come by (ditto for computers and broadband), so mobile phones are serving this unmet need, facilitating microfinance and thus helping reduce poverty.

Other interesting stats:
- 1.3 billion of global population connected to the Internet, compound annual growth of 20.3% for past 8 years.
- Internet ad spending of $40 billion is only 6.6% of global total of $605 billion and is growing at 33%. (Ha, I should double down on this little company while I can!)

Data from 2008 Global Internet Snapshot compiled by Imran Khan, senior analyst at JP Morgan. (hmm, can anyone get me access to that full report?)

That’s why medium and big tech companies can weather the unfavorable US economy trend by going abroad. Fruit trees in your backyard not yielding? Then go after the greener pastures outside of your backyard too. It’s called diversifying. That’s the other thing I love about software is that it’s not a physical object–a computer scientist can create value with merely a laptop (and some coffee!) The cost of making that first software copy is the most expensive, then every other subsequent copy ad infinitum is basically free. This is just the nature of information economics, and has obviously served Microsoft very well. Actually, tiny tech startups can do this too — by leveraging the distribution power of this thing they call the internets.
(more…)