In Brazil, Itâ¿¿s Laptop to the People

from the desk of Spectrum associate editor Erico Guizzo:

As a Brazilian expat coming to live in New York City several years ago, I was surprised to see people sipping cappuccinos at a Starbucks while tapping away at their laptops. What surprised me was not that people would pay US $3-plus for coffee but rather that they would carry their laptops around and use them at a public place.

In Brazil, a laptop is pretty much a luxury item. Students, for example, canâ''t usually afford one. Only corporate types can be seen with such objects of desire. An avalanche of taxes, added to the cost of importing the machines, sends their prices through the roof. Consider, for example, a Hewlett-Packard Pavilion notebook (15.4-inch screen, AMD Turion 1.6 GHz processor, 1 gigabyte of memory, 100 GB hard disk, and DVD-RW drive). In the United States, it costs $775 on HPâ''s online store. In Brazil, the same model costs $2112 at Submarino, Brazilâ''s main online retailer.

In the past few years, however, something remarkable has happened.

Prices began to drop, and sales of laptops are now skyrocketing. According to a recent study sponsored by the Brazilian Electrical and Electronics Industry Association (ABINEE), notebook sales this year should increase 211 percent versus last year. To put that in perspective, consider that desktop sales are expected to grow only 6 percent. Counting notebooks and desktops, sales of computers should top 10 million in Brazil this year, a growth of 23 percent over 2006. (By comparison, PC sales should reach nearly 70 million in the United States.)

The reason for such dramatic change is a combination of lower interest rates, government-awarded tax breaks, and stronger participation of both Brazilian and foreign computer manufacturers in a market once dominated by shady businesses selling smuggled equipment. The ABINEE study says that on the supply side there used to be just two or three major companies supplying computers to retailers; now there are about 50.

In fact, Brazilian technology news site IDG Now reports that Brazil is currently Intelâ''s seventh largest market, behind United States, China, Japan, Germany, U.K., and France. By 2010, Intel expects Brazil to become its third biggest market, with only United States and China ahead.

Brazil should embrace this wave of less expensive computers and try reduce prices even more. The high cost of electronics (not only computers but also videogames, digital cameras, and other devices) puts the country at great disadvantage in a technology-driven world where an increasingly large share of our knowledge, culture, and economy depends on those machines. The government has implemented a lower-cost PC program, but much remains to be done, especially in terms of eliminating excessive taxes.

Oh, and as for those big and pricey cups of coffee, Iâ''d always thought theyâ''d never work in Brazil, a country fond of its â''cafezinho,â'' an espresso served on a tiny cup, but late last year Starbucks opened two stores in Brazil. Hopefully customers are bringing their laptops with them.


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