Why Foxconn’s iPad Deal is Wrong for Brazil
Brasilia’s Unhealthy Obsession With High-End Technology
On October 13, after months of erratic negotiations, Brasilia finally reached an agreement with Foxconn, the largest global manufacturer of electronic components, to build iPads in Brazil. Production is now set to begin in December, backed by a $12 billion investment drawn in part from Brazil’s national development bank, known as BNDES. The country’s business class celebrated the deal as a turning point for Brazil’s technology sector, which has long been marred by excessive protectionism and a deficit of engineers. Unfortunately, their optimism is misguided: Even if production goes off without a hitch (a big if), the iPad will not put Brazil on a path to becoming an international technology giant. In fact, rather than competing in oversaturated markets aimed at high-income consumers, Brazil would benefit far more by leading the developing world in designing affordable technology for low-income markets. With the iPad, Brazil is putting all of its chips in the wrong device.