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Hi Alice,

Love your blog BTW...

I think that AMD is counting on it not appealing to you and to people like myself. We are the techno-cratic elite and they're trying to build the Model T of computers. I'm not in love with this thing and I think it's still way to expensive for people in Mexico et al. But the specs are not that far off for what it's needed to do. WinCE (as much as we all hate it) provides a faster booting, smaller foot print OS that can still do reasonable work. 128 mb of RAM is okay for WinCE, as is a 10G drive. I don't even mind the modem. Adding WiFi or even ethernet takes it away from their alleged target market. The tube monitor is the cheapest alternative. Sure, I've moved away from my tubes and my whole company is on flat panels. But if price is seriously the issue, then CRT it must be. I think they're missing the mark on price because the average income in their target market is like $200USD/month and a computer that runs a month & a half of wages will be a tough sell unless there's a real compelling reason to have to have it. Ford's T was similarly expensive, but it provided something that was critical: transportation. What does a PIC provide to the poor worker in Mexico/Russia or China?

# posted by Mike Shaffer 3:00 PM

Usually, I agree with a lot of your "rants", but on this one, I would have to disagree. I'm an American engineer living down here in Brasil, and I guess that I just see things differently due to my close proximity to AMD's "target market".

First off, I'd like to state that the system specs on this machine are very close to what is considered a "standard" home PC for the mid- to low-class population here (well, minus the Windows CE thing...that's just wrong...they could have tossed Conectiva on the box for here). There are many factors that come into play that "we" in the US and other, more economically sound countries are used to, that just doesn't exist here.

1) Exchange Rates: Even at the current price listed by AMD, it will never make it into the "average" poor household here. Knowing that the exchange rate from the US$ to the Brasilian Real (R$) is on the average at 3 to 1, just take the US$ amount and triple it...that's the new starting price.

2) Import taxes: Brasil (and other countries here in South America), tend to base their import taxes (and other laws, including Visa requirements) on a "tit-for-tat" system. If one country (say the US) puts a certain percentage on imported goods from Brasil, Brasil will, in turn, do the same to all US goods. To the US, it may not be much (knowing the dollar is 3 times the value of local currency), but here, it's a lot.

3) Localized manufacturing: This is the only way that I see it possible for AMD, or any other company, to make any electronic goods a viable purchase for the "poor". They have to reduce the extra costs of importing.

The price given by AMD is about the same (a little more, but not much) as a Sony Playstation 2 game console. A PS2, if your lucky enough to find one on sale, or some big promotion, will run anywhere from R$1000 to R$1300. Knowing that here, the Real has the same "buying power" as the US$ has in the States, that's a lot of money. And the PS2's are being imported by large import companies, that get a small break on the taxes to begin with.

Now we'll start on the income of the "average poor" person here. The norm, for a person that has a full-time, non-technical or "non-professional" job (ie. waiter, clerk, cashier, etc) is about R$500 - R$800 per month. These are the people (and even those with jobs that pay even less) that AMD is trying to market to. Problem is, the starting price, without monitor, is now over 2X the monthly salary of the average person. After paying everything else for daily life...well, I think you get the picture.

I do agree with the "decent OS" statement. Brasil in the process of migrating all it's government systems over to a Linux platform, which means most public schools and libraries would be doing the same. Personally, I think they should put a copy of Conectiva (a local, Portuguese version of Linux) with Open Office on it...that would at least give the people something to do with the machine.

As for WiFi, it would be a waste here. WiFi is a long ways off from gaining any form of popular use, once again, due to price. A regular 10/100 DSL router will start at about R$350. WiFi is close to twice the cost. Even for a well payed professional here, it's a stretch on the wallet.

Just to sum things up...even with what they are offering, it's still not affordable to their target market here in Brasil. Even a "crummy" computer in the US right now, say, the typical $300 low end PC, will start at about R$1500 here (and that would be an Intel P4 at about 2.4Ghz).

I find it sad, though. The gap between the IT "have" and "have nots" is huge here. Internet Cafes are all the rage here, since that's the only time most of the people here have with a computer. Most of my friends (and family) here are in AMD's "target" market, and you should see the looks on their faces when I tell them I have 4 PC's in my home in the US.

The people that AMD wants to sell to aren't going to buy this, not because of it's low specs, but due to price. What little they do earn per month (imagine trying to live on US$500 - US$800 per month in the US), after bills and everything else, is saved for the future.

I truly wish one of the these companies would move a facility here in country. The Brasilian people are some of the most industrious people I know (no welfare, no minimum wage to fall back on). You either scrape out a living, or you don't...it's that simple.

Anyways, wow...that was long. BTW, I love the site. I used to read your column in CS waaaay back in the day when you needed a fork-lift just to get it to your front door. Glad to see you two are still doing what you do best. :)

Tchau!

# posted by Xellon 3:25 PM

I agree with both comments - and great points made I must say. I was thinking WiFi as a cheap way for a neighborhood to share a high speed connection, but you're right, that's barely taking off here.

But the bottom line is: this is just too expensive and for what? A Model T allowed you to travel longer distances and move about in less time. This will let you IM and email when you dial in, but then what? Does it help you find a better job compared to using a PC in an internet cafe? And yes, CE is smaller in size and overhead, but CE?

This just reminds me of the mini-mania that started when Larry Ellison was talking about a $500 internet PC, that would run Java and store everything online. That sure took off. How about launching a PC factory in Brazil and creating actual jobs, and maybe then, the workers can buy a decent PC.

# posted by Alice 3:43 PM

A true, low cost, fully functional PC would make a huge impact down here, I know that for a fact. I always stress to my family here, most of whom have never even used a computer for more than a few hours...in total...how important getting the information divide removed is.

One reason why I stated earlier about the possibility of moving to Linux, is mainly due to cost. For a person to go out and buy a copy of Windows XP Home is R$300 (and that's cheap, getting it from the EBay down here). Toss on an office productivity package so they can do something other than IM and surf the web, and the price goes higher...well out of the reach of average person.

The AMD system, like you said before, "being out for the little guy", has their corporate "heart" (if that even exists) in the right place, but it just won't work, at least here in Brasil.

A few things that I see that would help get something like this into the "average" low to mid income household would be:

1) Functionality. It would need to be able to do more than be an "internet" PC. A person can go down to a local internet cafe, and for $5 per hour, surf the web and IM all they want. An office productivity package, ability to play with audio/video/photos would be nice.

2) Reduced cost. As stated before...move a factory down here! Not even just to this country, but anywhere in South America. What...95% of all computer goods are manufactured and assembled in South East Asia and North America...both of which have huge import taxes attached to them.

3) Small Form Factor. AMD did get this one right. I've been to many homes here of friends...those that AMD would be marketing to...and they just don't have the room for a computer. You have 3 or 4 people living in a very, very small apartment/house. You can't get to the kitchen without stepping on someone. Where are you going to put a mid-tower PC, 15" CRT, keyboard and mouse and be able to use it?

4) Optional TV output. This would be huge. For this market, the ability to use an existing TV as an output device rather than buying a monitor (and a place to put it all), would be a great thing. Even a 15" CRT monitor here is over R$400.

There are others, but I'll just try to keep things short.

All these companies are really missing out on a huge global market. Not only are they loosing possible income, but they are adding to the "have / have not" climate that runs rampant in developing countries.

A cheap system would do wonders here. I know they won't be able to get a PC into every home in a favela, but giving people an option would be nice. Not hack together cheap hardware, then add no functionality as far as software goes. That's just wrong.

# posted by Xellon 4:08 PM

I have to say that I live in Mexico, and I don´t think this will be a hit. Sure, it does a nice job of removing the digital divide, but I think the average Mexican would rather go to an Internet Cafe and put the money in the hands of another poor person than give it to a big American Corporation. I love AMD, but I don´t think this is the way to knock back the digi divide. I love the idea of putting a factory here in Mexico, and China, and Brazil. If you put on the computer, built in Mexico, it will take off. People will have pride in their computer, and those that can´t afford it will still go to a cyber cafe that uses some variation of this "mini" pc. I think its a real nice concept, but that way they are taking it won´t be effective in any concrete way. Which is too bad, they need it down here to compete in a new world.

# posted by Cyrus 6:12 PM

Never mind, I didn´t read the article. If they can advertise the fact that it is made in Guadalajara (3 hours from me :) ), and really do a good job advertising, it could take off like crazy. Not saying the computer is great, but if they play their cards right, it is better than nothing. And Alice, WiFi is useless here, absolutely useless. I couldn´t find a hotspot in 150 km. I think it should have an ethernet port (Broadband is priced competitively with the US prices), but WiFi is just a useless add-on.

# posted by Cyrus 6:18 PM

Honestly, this is not a horrible thing. Yes it's a piece of junk to us, but we're using the Intel "it's so hot we redesigned the mobo standard" P4, and the AMD "nyah nyah beat you Andy" Athlon 64.

As for the "decent OS" comment. Have you ever considered how much less trouble we would have with Windows if it worked like CE? CE programs have to have the DLL contained with them. They also can't install themselves 20 places on the internal HDD. Now it's not perfect, but look at your average winblows program, alot better eh?

Oh, and you're "$300" range computers. I've seen Dell advertise these, after rebate, which many people don't understand how to get. I've also seen the rebate be in the form of a "merchandise credit check". This is useless unless you want to buy 150$ of stuff you don't need or one overpriced memory upgrade to get the machine running WinXP to 256MB from 128MB (no SP2 machine should be running on 128MB!).

Finally, some of the other "$300" computers are nothing more than a PC Chips all-in-one board with a mobile athlon 2000 overclocked to perfrom like a 3200 (hence the nomenclature on the fan: 3200A. This wouldn't be such a bad thing, 'cept for the failure rates.

Oh and before you go ripping about a 64$ monitor, consider that most stores charge over 130$, even for a lowly 17" CRT.

The one change I would make to it, if it doesn't have it already: a 10/100 ethernet. I guess you could put 11b in it too, price on that has fallen, but 11g would put you over budget.

Just my 2 pence as someone who builds these things, and fixes other people's screwups, including bad assumptions.

# posted by Anonymous 7:26 AM

I have this old Compaq PII that I got when I built someone a new box. It's a modest PC, but I figured it would make me a nice Linux- or FreeBSD-based firewall/router gateway. Now the only thing I want to do with it is ship it down to someone who could REALLY use it.

When I realize how much I take my immense fortune for granted, I feel nothing but guilt.

# posted by Terry 10:50 AM

If you want to send a computer to those who need them here in Mexico, let me know at cyrus.artz@aliceandbill.com I know people in my school who could really use them, and would appreciate it more than you can know. Maybe FedEx would even be willing to ship for free. As it is, it would cost well over $ 100 to ship them here.

# posted by Cyrus 1:04 PM

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