Hybrids are the smart choice for developing markets

Nokia is gearing up to launch its life tools product next month across the globe. It's a suite of phones and services designed to target very low earners in developing countries by giving them access to mobile computing and Internet services – in many ways leapfrogging attempts to create low-cost PCs for the same markets.

Nokia has already soft-launched its life tools service in India, and this week Indonesia. A series of phones that retail for between 20 Euros and 54 Euros - before taxes and subsidies - begin shipping next month.

The head of Nokia Interactive - Asia Pacific, Sandy Agarwal, outlined the promising future of these services at a conference in Singapore in September.

“The next billion consumers will come from rural areas,” Agarwal said. “We never thought about the impact of mobile. What is happening, mobile is actually helping enable better lives of people. It’s helping small businesses. According toGSM, for every 10 per cent increase in subscriber numbers, GDP goes up by 1.2 per cent.

“There are 1.8 million new subscribers every day, I don’t think there’s ever been another device like the mobile phone.”

The potential of mobile phones to solve development problems began being realised over the last five years in Africa and India. Reuters pioneered a market news service in India in 2008 that helped fishermen find the best market prices for their catch. In Rwanda, Africa, a company set up a system that allowed village entrepreneurs to wholesale electricity, usingSMS - giving the country’s energy utility far greater reach without the need to set up new branches. In Kenya a mobile payment system based onSMS has become increasingly ubiquitous. These are just a few examples of the services being offered over low-cost handsets that are materially changing lives in the developing world.

Last year I was talking to Michael Spence, the development economist who won the 2001 Nobel Prize for his work on the way the availability of information affects markets.

“The cell phone explosion is having a major impact. Let me call it a revolution,” Professor Spence said to me at the time.
“It is an access point to the formal economy. Cell phones are the platform for a lot of financial services. Being able to save, get insurance, all these things.