Myths and misconceptions about Asia's tech industry

Asia has been oft referred to as the ‘manufacturing hub' of the world with people saying that China is the world's factory. Over the last few years, Asia has also emerged as the ‘go-to destination' for banks and financial service companies given the resilience that the region showed in the wake of the recent financial crisis. Of late, Asia's technology industry has also become a force to reckon with and a growing number of Asian companies are poised to emerge as global technology leaders, with their own cutting-edge products and services combined with a growing reputation for innovation.

Closer home, Indian companies like Infosys, Wipro, Mindtree, and TCS have become the leaders in the IT services industry. India has almost become synonymous with the word ‘software'. Taiwan has become the hotbed for hardware innovation and is aggressively challenging the western norms of design, scale and innovation. The rise of several new Asian innovators, such as Asus, Lenovo, and Samsung amongst others comes as markets across Asia see explosive demand for computing of all kinds, with far-reaching implications for the technology industry and the region. To understand why these changes are happening, and what they mean, some widely held misconceptions about Asia need to be dispelled.

Hub of innovation

The first myth is the misperception of Asia as solely a manufacturing location and not a hub of innovation.

Asian technology companies have long been the world's factories, producing hundreds of millions of PCs, servers and smartphones each year. But Asian companies already play an important role in technology R&D and design and engineer many of the products that get sold in the US and Europe by brand-name companies such as Dell and HP.

Several large multinationals have discovered the engineering talent in this country and it is no wonder that companies like Intel, Microsoft and Cisco have their global innovation hubs in India where thousands of bright young minds are at work discovering the next big ‘Eureka'!

Asian companies have driven global technology innovation revolutions several times with the most recent being the introduction of the Ultrabook which is a new breed of computers that combine best-in-class performance and improved responsiveness with thin, elegant design.

Acer, Asus, Lenovo and Toshiba were the first to recognise that Ultrabooks meet a growing demand for performance and mobility without compromises and are all companies based in Asia.

Purchasing power

The second myth is the misconception that buyers in emerging markets are only interested in buying cheap devices, not high-end products.

Rising income levels and a desire for access to the latest technologies make emerging markets more important than ever. Buyers in these countries often want the latest and most advanced technology available on the market.

Asia's rising middle class which is set to grow from 570 million people to 945 million by 2015 can increasingly afford to buy the latest and best equipped devices, too. The cost of an average PC has fallen from 75 weeks of income in 2005 to 30 weeks of income in 2010. Consumers are more willing to invest in high end technology products today than ever and just taking an example of the PC industry we're increasingly noticing a trend of consumers buying higher-end full functionality machines than the low cost basic computing devices. In the US, 84 per cent of PCs sold were based on the Intel Core family of processors, and in India this number is 82 per cent, clearly indicating that emerging market consumers are not buying cheap.

PC prowess

The third and most important myth that needs to be dispelled is that Asian consumers will not buy multiple computing devices.

Contrary to popular belief, rising incomes enable Asian consumers to own multiple devices, and consumers will purchase multiple devices from smart phones to full-functional PCs. Last year all categories showed positive growth whether it was smart phones or tablets, netbooks or laptops. Despite increasing tele-density across the continent, Asian governments are realising the importance of computers as a tool for learning and improved productivity and they are actively promoting wider adoption of computing in education and business. For instance, the state government of Tamil Nadu in India plans to distribute 6.8 million notebooks to students from government-aided schools and colleges over the next five years.

Together, these trends translate into a significant growth opportunity for innovative Asian technology makers. Emerging markets like Southeast Asia, China and India will account for two-thirds of global PC market growth in the coming years. Companies like Asus and Lenovo are positioned well to capitalise on this demand because of their close proximity to Asian markets and deep insight into local cultures and consumer usage models. Combined with their focus on product innovation, these Asian companies have an opportunity to emerge as global technology leaders.

(The Author is Director of Marketing, Intel South Asia)

COMMENT NOW