High-Tech in Search of the "Next Billion Internet Users"

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Tech Firms Woo 'Next Billion Users' [Wall Street Journal]

Summary: During Intel chairman Craig Barrett's trip this week to China and India, he made the comment, "There are about a billion Internet users. The next billion aren't going to be city dwellers." In order to reach these potential customers, Intel and other high-tech companies including rival Advanced Micro Devices, are undertaking efforts to develop localized, affordable technology, and channel investment capital totaling billions of dollars to rural areas, particularly in China and India. One of the problems global tech and software companies are facing are maturing markets in advanced economies, as well as in the more developed areas of emerging markets. Therefore, there's an understanding that investing in the more rural and poorer areas will help bridge the digital divide, and as Microsoft India chairman Ravi Venkatesan puts it, "This is a good way to do long, long-term business development. We are under no illusions that this is going to generate a quick payoff." Such efforts also win the support of host governments.
Related links: Earnings Conference Call Transcripts: Intel Q3 2006, AMD Q3 2006, Microsoft F1Q07 and Motorola Q3 2006 • In Recognition of New "Mixed" Software Environment, Microsoft To Work With Novell's Linux • Linux v. Microsoft: Third World Showdown • Intel Shares Boosted by Q3 Report, But Not Everyone Is Convinced • AMD Profit Margins Skid During Price War with Intel • Microsoft Beats the Street with 11% Earnings Gain • Motorola Gains Market Share But Misses Q3 Sales Target
Potentially impacted stocks and ETFs: Intel (INTC), Advanced Micro Devices (AMD), Microsoft (MSFT), Motorola (MOT) • ETFs: iShares Dow Jones US Technology (IYW), iShares S&P Global Technology (IXN), iShares Goldman Sachs Semiconductor (IGW), Semiconductor HOLDRs (SMH), Technology Select Sector SPDR (XLK), Vanguard Information Technology ETF (VGT)

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