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The economic value of a Personal Computer

Published 08 May 2007, 11:14 AM

Mass media such as books, cinema, radio and television are usually consumed in an entertainment context. One doesn’t usually think of the economic value derived from reading a book or watching a television show and in most cases it might be hard to quantify it.

Both the Internet and mobile media are different from other mass media in that they can deliver economic value that is quantifiable. This in turn means that the value of devices used to access these media (the PC and the mobile phone) and the services that enable the access (a broadband subscription or a mobile subscription) can also be quantified.

The high penetration of mobile phones in India is partly because of the economic value it delivers. A high percentage of India’s GDP (about 54 %) is derived from services and mobile phones have enabled a better market for services. Hence plumbers, electricians and people from other service oriented professions all carry mobile phones. A (pre-paid) mobile subscription for a year is about $50 and the cost of the entry level handset is about $50. The economic value of having the phone far exceeds the cost of the phone and the subscription (in most cases).

Personal computers (like mobile phones) are capable of delivering both economic and entertainment value. The success of gaming PC’s and media center PC’s attests to the fact that is possible to create niche PC markets largely focused on yielding entertainment value.

What about the economic value of having a PC? In India, my guess is that the PC currently yields an economic value of about $100-$200 per year (I suspect it would be far higher in the US and other developed economies). In India, cheap broadband rates coupled with decreasing PC prices and services going increasingly online (banking, ticket booking, stock trading, auction sites, bill payment) are poised to vastly increase the economic value of having a personal computer. In many ways, the PC allows one to bypass inefficient infrastructure and systems. My belief is that the economic value will increase further as computers are increasingly used in a one-to-one service delivery model. For instance, one of my neighbors in Bangalore, who is a music teacher (vocalist), gives music lessons using her PC (and VOIP software) to her student in the US.

Dear reader: Do you think of your PC as an entertainment device or as a device that yields economic value or both? What kind of applications do you think will allow you to derive more economic value from your PC ? What are the economic value equivalents of gaming PC’s and media center PC’s ?

Posted By rkrish67 | 6 Comments | Trackbacks | Permalink


Comments

Hi , The Pc has been a boon for the last 20 years+. Now the time may have come to think of its new form. Will it be a handheld device which will have functionality of a pc.which is always connected to the net....needless to say wirelessly. which will also double up as a mobile phone. Like an ipaq . what do u think will prevent this from becoming the personal computing,entertaining device etc etc of the future? It will surpass the economic value of the PC as we know it today! Puru
# Wednesday, May 09, 2007 10:58 AM by k_purushottam
Thanks for the comments Puru. It is quite possible that once the web navigation and data input problems for mobiles is solved, the mobile phone might be the computing device of the future. My feeling is it is still a few years away. In India though, the mobile is already the first computing device for many people. I agree with your premise; having an always on and available computing device would be of huge economic value. That said, a lot of applications are going to require a bigger screen, faster processors and lots of storage. Until faster processors and storage (this is happening already) get into mobiles, it looks likely that the PC in its current form will stay on for some time to come.
# Wednesday, May 09, 2007 11:28 AM by Krishnan Ramanathan
Krishnan, I think of my computer mainly as a tool. I guess you could say it has economic value, but all PCs are still too slow, too hard to use and too prone to problems. I think what we need is an "instant on" device, maybe even one that can be customized for the user. With regard to screen size -- I use my PC mainly for web search, email, web authoring and writing -- so size isn't as big an issue as clarity is. I can't figure out why no one has yet come up with a device with a foldable or portable display. Size, in fact, is one reason why I would welcome a fast, usable mobile device like k_purushottam suggests. I can't be the only one tired of lugging my laptop around.
# Friday, May 11, 2007 11:11 PM by Jamie Beckett
Thanks for the comment Jamie. You are right that the PC can be sometimes hard to use especially for someone without a computer education. I also agree that an "instant on" mobile device would be ideal for many productivity applications. As you mention, a separate bigger display on a mobile (or allowing to connect to a bigger display) would help. However, Internet consumption on the mobile hasnt yet taken off for some reason in many parts of the world (even in India where many people have GPRS capable handsets). Whatever the reasons for this, it is limiting the mobile from cannabilizing economic value which the PC enables as a data access device - Krishnan
# Wednesday, May 16, 2007 02:55 AM by Krishnan Ramanathan
There is one value as a business tool and one value as a personal tool. The most important feature as a personal tool is that it is a highly efficient asynchronous communications tool. Historically, over the past several thousand years, humanity has always been willing to make large investments in new communication technologies, because the benefits have always come very fast. For example, here in the US even poor people who have a hard time putting food on the table typically have a phone, cable TV, and Internet access. The only anomaly here in the US is that unlike in other countries, the Government itself does not invest in the infrastructure necessary to make the PC even more efficient.
# Thursday, May 17, 2007 08:49 PM by Giordano Beretta
Interesting comment, Giordano. The poor in India have television access. Many also have mobile access now thanks to the low cost of handsets and mobile services. Most of the poor dont own a PC because it is unaffordable. That said, I know even well off people in cities who dont own a PC/Internet connection yet. I suspect the main reason is lack of PC literacy, lack of local language content and lack of locally relevant applications. To solve the literacy issue, it would help if some company like HP or Microsoft provided a training video on "How to use the Internet for fun and profit" along with the PC. I think one benefits more from communications infrastructure when one lives in cities (as is the case with the US). A lot of people in India live in small sized villages and hence might not derive the same benefits from communications infrastructure that a city dweller would. - Krishnan
# Saturday, May 19, 2007 01:03 AM by Krishnan Ramanathan

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