I've been lax in my reading of Ingrid Lunden. Caught up now and richly rewarded. First, the only thing that seems to be keeping Blackberry afloat these days is that it established footholds in very large markets, such as Indonesia, southeast Asia and Brazil, before Apple and Android.

Only a matter of time...

Sony (NYSE: SNE) Ericsson (NSDQ: ERIC), as it winds up as a troubled joint venture to become fully part of Sony, is spinning out some talent in the process: it’s understood that Anderson Teixeira, formerly an executive that had run different regional operations for the JV, is now Apple’s first head of Latin America—a sign of Apple’s growing interests in the region.

If accurate, this would be the first time that Apple has hired a regional manager for Latin America in recent times, according to AppleInsider. And indeed, Apple, whose mobile devices and computers are priced at the higher end of market, has entered Latin America perhaps more slowly than it has other emerging economies like China.

Because Apple puts Latin America into the same category as the U.S. and Canada in its results, we don’t know exactly how much revenue the company generates there, but it’s clear that the figure is going up and represents a big opportunity for the company. In October, during Apple’s Q3 conference call, CEO Tim Cook noted that revenues in Latin America’s biggest economy, Brazil, were up 118 percent over the year before.

She notes that Teixeira, a Brazilian, may focus first on building a pipeline from Brazil that will export Apple products into North America but almost certainly will also help build up Apple's actual sales presence in the region.

Next, we learn that the smartphone is dominating technology investment:

Mobile investments accounted for 42.4 percent of all technology investment in 2011—or $6.3 billion for mobile startups in a year where, overall, venture capital investment in technology totaled $14.9 billion.

That’s a record proportion for the sector, and a massive spike on 2010, when mobile represented 30.4 percent of all tech investments worldwide, or $6.1 billion of investment. (See table at end of post.)

Ironically, while mobile is representing the greatest amount of investment, $6.3 billion falls just short of the biggest-ever year for mobile investment: that honor goes to 2006, when VCs pumped $6.4 billion into mobile technology.

Drilling down: As for the single-biggest category for investment in 2011, it’s consumer applications that have won the day—a sign of how the smartphone boom is leading to a big rise in the amount of companies rushing in to service those new consumers, and a subsequent rush of money men scrambling to finance them and get a piece of the action.

When I began this site, back in 2009, one of the first things I wrote was "The future is Brazil". 

For William Gibson, the future was Japan.

Wrong!

For Neal Stephenson, the future was the metaverse. 

Considering that we are bringing the virtual into our reality rather than the reverse, this also is wrong.

Want a location of the near-future? Brazil. That's my bet. Young, brown, growing, bustling, crowded, beautiful, violent, changing, impoverished and wealthy.

Ever watch those 1950s sci-fi movies? Where the future, circa 1990, is radically different? Flying cars, space travel, subservient women in short skirts. In just a few years, today's view of the future will be proven just as silly. The smartphone, the mobile web, location-aware platforms, real-time infinitely scalable and almost free person-to-person-to-machine-to-machine-to-group data services will *disproportionately* empower the marginalized and the young. They will function on an almost equivalent plane. No matter where they are. Simultaneously, with AR, always-on video chat and customized information feeds, no one will actually see this new world the same as anyone else.

And we have no idea what to expect. Though we can be certain there will be growth, retrenchment, violence, hope and, as is humanity's way, an overarching pivot toward a better circumstance for all. That said, know that as we go through this wrenching period of change, just like London in the 1800s, there's going to be a good deal of shit hurled your way.

Hey, that's not bad.

Anyway, we're nearing 2012 and the New York Times looks to Brazil as a possible representation of our future:

Today Brazil is simultaneously pursuing what might seem to be contradictory revolutions. At one level, it is unshackling the market and working to give companies the incentives they need to grow and hire and profit. At the same time, it is taking poverty head-on, clinging to labor laws that are inefficient but provide some cushioning to the poor, pumping welfare money into poorer regions. The numbers tell the story: the economy grew at more than 7 percent last year, but, unlike many of its fast-growing rivals, Brazil is narrowing its famously wide (and violent) gap between rich and poor.

I've written several times here that I think America, if not the world, should look to Brazil, today, to better understand its future. (Do a search on this if interested). I've also written that Apple has *earned* my acceptance when they state the lower-then-expected iPad sales are due to supply constraints.

I accept. But, as I've written, I'm skeptical. I want to see the numbers going forward. 

These two issues have somewhat merged in this letter I received today from a reader in Brazil. I hope you enjoy it:

Dear Brian,

Let me start by saying that I'm brazillian and a regular reader.
I've read here multiple times that you have doubts that Apple is having
trouble producing enough iPads to keep up with demand.

While your arguments (as usual) are logical, there is some evidence in
brazillian media that suggests they really might be having constraints.
Please Google Translate this page - it is from Brazil's largest newspaper
(and our only relevant online newspaper), Folha de São Paulo:
http://www1.folha.uol.com.br/mercado/929209-ministro-diz-que-ipad-nacion...

Basically, Foxconn's factories here in Jundiaí (São Paulo State) are being
reassigned to produce iPads *and* iPhones - and our government (through our
Telecommunications minister) is leaking all the information for us.
Now, there are a lot of reasons to produce here, including a huge tax
incentive the government just announced - it will allow Apple to sell us
iPads for 33% less than today (we currently pay R$1749 for the basic model =
US$1100).
Nevertheless, manufacturing stuff here is **expensive**. We have
european-like labor-laws, unions have a HUGE ammount of power (Lula - our
most popular president ever - was a Union member back in 1970/80s) and
importing components which we don't make
(**cough-everythingwithsemiconductors-cough**) is REALLY hard, thanks to
crazy importation taxes and customs bureaucracy - some stuff may take up to
TWO MONTHS waiting on our dumb customs system.

While we are a considerable market (we have ~30 million people which *can*
buy iPhones, iPads and iGadgets [not Macs, though] + 100 million which can
afford their own cheap, Symbian/Android-based smartphone), **we are just not
worth it**. It doesn't make sense for a company like Apple to invest US$12
billion here (our government leaked that as well) and produce stuff to sell
just for brazillian people - they must be investing that huge ammount of cash
to export for everyone else, as well.

While the Brazillian-iPad might cost US$770 here (and, I guess, about 400-450
to produce) and be *very* popular here, there is no way in hell people in
other countries would be willing to pay that extra 150-200 bucks to cover the
Brazil-cost (assuming Apple wouldn't want to just leave a huge chunk of their
nice margins here in Brazil).
The only scenario where that makes sense (at least in my head) is if Apple is
having **serious** production line issues and is, in reality, desperate for
new production lines. The iPhone might have covered the "bad" (as in: not
spetacular) iPad sales last quarter, but I just can't imagine Apple counting
on that for every quarter and reject the money from people who are **still**
waiting early on lines on Apple stores throughout the US.

Cheers from Brasília! :)

Interesting, no? What do you think?

Apple appears to be relying even more heavily on Foxconn. Supply issues are, apparently, a very real concern -- as are costs, no doubt. Still, remember that we now have iPad 2 for $500. A year ago we would have assumed the equivalent of iPad 2 would be at least $1,000. And thought it was awesome.

Lastly, I must say, I am pleased that Apple is helping to move production of our most advanced personal computing devices away from just China. For whatever reasons.

I began this site noting that "the future is Brazil." I've tracked Blackberry's progress in Brazil. When I write about America's future, I typically mention that we need more -- not less -- trade, focus and, yes, immigration with South America.

China, apparently, is listening. Today, from DigiTimes:

ZTE, a China-based supplier of telecom infrastructure equipment and terminal devices, has signed an MOU with the Brazil government for developing a telecom park in Brazil.

The park occupies 50 hectares (123.6 acres), consisting of four zones specifically for use by an R&D center, production base, administration and supporting service center and residential community of employees, the report indicated.  

and...

China-based telecom equipment supplier Huawei Technologies plans to invest US$300 million to set up a R&D center in Sao Paulo, Brazil.

Huawei entered the Brazil market of mobile telecom equipment in 1999 and has established a technical training center in Campinas, Sao Paulo, the source noted.

Both these companies are aggressively moving into low-cost smartphones: Android. And not just Brazil, or China, or India, for example. But also the USA:

Chinese smartphone makers Huawei Technologies Co. and ZTE Corp. are looking to break into the top U.S. carriers. ZTE said it would quadruple the number of smartphones it ships globally to 12 million this year, which includes its first model for a top-tier wireless provider in the U.S. Huawei, which already provides a smartphone to the smaller prepaid providers, said it is in talks with the four national carriers.

Huawei's and ZTE's push into the U.S. comes at fortuitous time for the companies. Both are known for their ability to supply low-cost products, which have become more crucial as carriers seek to get smartphones in as many hands as possible. As a result, both companies are expecting an expanded presence in the U.S.

The Chinese companies face a significant hurdle in building consumer awareness for their brands, particularly because many of their mobile devices sold in the U.S.-- basic flip phones and mobile modems -- only have the carrier's name.

ZTE and Huawei are looking to emulate HTC Corp., which moved from a quiet supplier of carrier-branded smartphones to a major player in the U.S. market. The companies share a similar philosophy of moving quickly to fulfill the carriers' needs.

Nielsen looks at some of the larger smartphone markets. Wherever price is of paramount concern, young buyers, who have to have a mobile device, choose prepaid plans.

The overwhelming majority of young Brazilians (90%) prefer the prepaid mode of payment to the postpaid, ranking third behind Russia and India. Considering that more than half (56%) of Brazilian consumers aged 15–24 pay their own mobile phone bills, they are careful to not incur big overuse charges. Comparatively, only one in four consumers in the U.S. and Spain aged 15–24 pay for their own phones and only one in five young Italians do. About half of Russian (47%), British (52%) and German (56%) consumers pay for their own mobile phones as do one-third (35%) of Indian consumers.

Smartphone makers, like Apple, that rely on premium subsidies from carriers, which the carriers offset with expensive, long-term contracts, are not under threat. The market is too big, growing too fast. But, if they want to increase market share, they will need to embrace prepaid and make devices that are affordable. Assume a two-year window. By summer 2012, say, an iPhone 4 should be available, without a contract, for under $200. At most.

Way back in 2009, and several times after that, I've said that the future is Brazil.

For William Gibson, the future was Japan.

Wrong!

For Neal Stephenson, the future was the metaverse. Considering that we are bringing the virtual into our reality rather than the reverse, this also is wrong.

Want a location of the near-future? Brazil. That's my bet. Young, brown, growing, bustling, crowded, beautiful, violent, changing, impoverished and wealthy.

Today, they have a new President:

A one-time Marxist guerrilla who was tortured under Brazil's long dictatorship became the first female president of Latin America's largest nation when she was sworn in Saturday.

Ever watch those 1950s sci-fi movies? Where the future, circa 1990, is radically different? Flying cars, space travel, subservient women in short skirts. In just a few years, today's view of the future will be proven just as silly. The smartphone, the mobile web, location-aware platforms, real-time infinitely scalable and almost free person-to-person-to-machine-to-machine-to-group data services will *disproportionately* empower the marginalized and the young. They will function on an almost equivalent plane. No matter where they are. Simultaneously, with AR, always-on video chat and customized information feeds, no one will actually see this new world the same as anyone else.

And we have no idea what to expect. Though we can be certain there will be growth, retrenchment, violence, hope and, as is humanity's way, an overarching pivot toward a better circumstance for all. That said, know that as we go through this wrenching period of change, just like London in the 1800s, there's going to be a good deal of shit hurled your way.

I've told you that the (near) future of our world can be revealed by looking at Brazil today. I've said this too many times to provide the links. Just search them yourself.

The tv show 60 Minutes does just that:

Over a year ago I wrote...

The future is Brazil. Young, brown, bustling, growing, transforming, spreading, boisterous, crowded, violent, hyperconnected and increasingly wealthy. And the future starts in 2016. This is the year of the Olympic Games, held for the first time ever, in the "developing world"; Brazil. This is the year of the end of the potential second term of the transformative presidency of Barack Obama. This is the year of a billion plus smartphones and the demarcation of wealth creation and opportunity shifting from the old to the new. This is the year India rockets a man into space. This is the year, 2016, when all entitlement/non discretionary spending consumes nearly 90 cents of every US government dollar.

This site focuses on smartphones. In America, we no longer have the capability of actually making these devices. Taiwan does. China does. Thus, I've talked several times about Foxconn, the giant electronics maker, based in Taiwan that employs thousands of Chinese (all living in quiet desperation, apparently).

And what do these have in common?

Well, maybe Brazil can rise up to compete with Taiwan and China in this area.

Billionaire Eike Batista has a radically dream, though: he wants to steal Apple manufacturing from China and bring it to his home country of Brazil.

Batista made his millions in the mining industry, and he’s using that money to construct a $1.6 billion manufacturing plant that spreads over 90 square miles. What he wants is for Apple to bring its manufacturing to Brazil, which would help radically stimulate the local economy. If Apple’s not interested, Batista’s second choice partner would be BMW.

Maybe this is something that Apple should consider. Cupertino’s manufacturing relationship with Foxconn has been rife with bad press stemming from reported abuse of employees on the hands of Foxconn management. Even if those reports aren’t entirely accurate, Foxconn has been a PR headache for Apple: if Brazil can come close to Foxconn’s margins, maybe it’s time to consider a change.

Screw the bad press. Certainly, we would benefit from having the ability to get our most advanced, covetous personal technologies from more than one country: