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September 7, 2011 Previous day Next day

For many people around the world, especially 2.5 billion people living in China, Latin America and Eastern Europe, computer prices are dropping quickly relative to average weekly incomes. The trend in wages and prices may mean new growth opportunities for computer manufacturers even amid the growth of tablets which are often priced beyond the reach of many consumers outside the U.S.

 

According to data released earlier by Intel, the cost of an average priced laptop in China was equal to 174.7 weeks of average income back in 1995. That shrunk dramatically to just about 30 weeks of average income in 2005, and slipped to 7 weeks of income in 2010.

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A motorcyclist in Egypt brings new meaning to ‘mobile’ computing. The prices for computing are dropping relative to wages in Egypt, a trend that is expected to continue even amid the revolution last Spring. In 2009, a PC cost on average less than 14 days of work and is expected to be 6.6 days of work by 2014, according to data from Intel.

 

By 2014, Intel estimates the cost of an average priced laptop in China will drop to the equivalent of 2.6 weeks, putting China very close to the worldwide average of 2.3 weeks of average income.

 

This rapid drop in PC prices relative to weekly wages is having a major impact, pushing emerging markets to account for more than 50 percent of Intel's revenues, according to 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."

 

Just 6 years ago, the average person living in India would have to work more than 440 weeks in order to amass enough wages to buy a PC. In 2010, the number of weeks dropped to less than 31. In 2014, some estimate a decrease to about 10 weeks of wages.

 

In Latin America, which has a population of approximately 714 million, the cost of a PC fell from 41 weeks of wages in 1995 to 6.5 weeks in 2010. In 2014, it is expected to cost 3.4 weeks of wages.

 

PCs are becoming more affordable more quickly for the 402 million people living in Eastern Europe, where a PC cost nearly 48 weeks of work 1995. In 2010, it took 5 weeks of work to afford a PC, and that is expected to slip to a little more than 2 weeks in 2014.

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In China, it took an estimated 175 days of work to purchase a personal computer in 1995, and by 2010 the price dropped it to just above 7 days of work, according to Intel. Photo by Mira Images

 

Compare that with more established economies of North America (348 million people) and Western Europe (432 million people), which dropped from 4.9 and 5.6 weeks of average income respectively in 1995 to .8 and .9 weeks of income in 2010. By 2014, an average priced laptop is expected to cost a half day's wages in North America and .6 weeks of wages in Western Europe.

 

According to the Intel data, the worldwide average has dropped from 25.7 weeks of income in 1995 to 4.2 weeks in 2010. It is estimated that by 2014, an average-priced laptop will cost 2.3 weeks of average income.

 

Smith estimates that approximately two out of every three PCs will be sold to emerging markets, and that nearly two out of every three PCs will be sold into the consumer segment. Smith also estimates that about two out of every three PCs sold will be notebooks.

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