Portability, interconnectivity will be king in the Latin American technology industry
Whichever company builds smarter, cheaper devices that allow owners to securely access their information on the go will be the winner in booming Latin America.
“Maybe your desktop will morph into your TV, or your TV will become your desktop, said Juan Meza, director of strategic business development for Sony Professional Solutions Latin America during WorldCity’s Global Connections on July 29, which focused on the high-tech revolution in the region. “Things will be self-aware, network aware, where you can continue watching a movie from one place to another.”
Electronic integrated circuits, simply known as computer chips, were the US’ top export in 2010 with about $37.57 billion worth being shipped out, according to WorldCity’s TradeNumbers publication based on U.S. Census Bureau data. Almost $5 billion of that went to Mexico. Brazil also imported nearly a billion dollars of computer parts from the US that same year.
The potential for mobile devices in the region is huge, panelists told a group of about 80.
Phillip Vandervoort, head of business and marketing operations for Microsoft Latin America, said it dwarves the company’s business in Europe.
“If you think about it in Belgium Microsoft’s revenues were $650 million, but that was only on 10 million people,” he said. “In countries like Argentina and Colombia you really have that massive growth going on and the money is available.”
The multibillion-dollar brain child of Bill Gates isn’t the only one betting on South America.
“The smartphone is where the growth is in Latin America. Last year it grew 140% and the next few years it’s going to grow 40% to 70% year over year,” said Ernesto Piedra, Samsung Latin America’s vice president for mobile communications. “This year we’re looking at, in Latin America, about 1.5 million tablets to be sold and by 2015, eight million.”
On top of that an estimated 120 million Latin Americans use social media and having the latest smartphone is often a status symbol throughout the region.
“Guatemala is a really good market for us,” Piedra continued, “we’re definitely targeting business-to-business; it’s one of the biggest growth areas we see,” for example on airlines, or doctors using tablets.
Meanwhile, ensuring all the bits and bytes individuals and companies put on the cloud are secure depends more on the phone or tablet they use than the servers where it’s all stored.
Apple products like the iPhone and iPad are lauded for aesthetic beauty and intuitive operating systems, but from a security side they’re not always up to snuff, Vandervoort of Microsoft said. An executive who insists on using his or her iPad can often be the point hackers use to infiltrate the system.
Whether the broad network and the servers they rely on are safe depends on the government of the country where the hardware is located.
It “boils down to: How much do you trust the operator? How much can you trust the government of the country where the severs are sitting not to force a company to open the data?” Vandervoort said.
Finally the panel addressed the global supply chain that takes these products from idea, to manufacturing and into consumers’ hands.
“Planning and forecasting are extremely important right now,” said Juan Maria Gallego-Toledo, chief commercial officer for Celistics, a global logistics firm that specializes in the mobile electronics space. You “need to have more visibility about what’s going on in the full chain of supply to make sure you can move the product to the right place in the right way.
“If you move a product by boat you save a dollar versus by plane,” he added.
And though parts for electronics are built around the world, it seems as though they’re still mainly assembled in East Asia and conceptualized in the US.
Sony’s Juan Meza said it’s likely lower-end products will come from China, while the higher-end ones will be built in Korea.
Finally talk turned to Brazil, and whether Latin America’s biggest economy from a technology standpoint will be ready for the upcoming World Cup and 2016 summer Olympics.
“I’ve been talking to Japan almost every other day and we’re shifting massive resources to Brazil to set up infrastructure,” Meza said. “I think the biggest benefit is however far they get will be much better than where they are today.”
Gallego-Toledo of Celistics said he was in Beijing for the 2008 Olympics when many similar issues were raised, but ultimately resolved.
“I’m sure there will be complaints,” he said, “in China it was the air condition. They’ll take the measures they need to take.”
Global Connections is one of seven event series organized by WorldCity to bring together executives on international business topics. The Global series is sponsored by Florida International University’s business school, Comcast Business Class and by real estate company Waterford at Blue Lagoon.
The next Global Connections forum is scheduled for September 30 and will focus on Medicine, Healthcare and Wellness in Latin America.