A $40 tablet, by selling in places Silicon Valley barely notices, may change the competitive landscape.
The inexpensive device is called a Ubislate 7Ci, made by a London company called Datawind. Its initial market is schools in India. After a rocky start, Datawind's newest device is a fully functioning 7-inch tablet, with a touch screen, Wi-Fi capability, a microphone and camera, a headphone jack and a USB port. In other words, pretty much everything you need to be fully functional on the Internet.
In a test, it sent e-mails, downloaded two books and a first-aid guide, took and sent pictures, and offered several games without difficulty. There is a video that shows it in action, and another that lists its internal specifications.
Every criticism a Western reviewer might have with this tablet (the keyboard is small for big American fingers, the camera resolution is low, the software has lots of ads) must also meet with the riposte, “Yeah, but…it's only $40.†For people who can't dream of owning even a first-generation iPad, it's more than enough.
“The biggest problem we have with this device is that none of the decision makers, the reviewers, or the trend setters are our customer,†said Suneet Singh Tuli, the Canadian-born chief executive of Datawind. “Personal computers caught on in the U.S. when the price got to about 25 percent of the average person's monthly income. In India, where people make $200 a month, that is about $50.â€
In truth, that may not be the biggest problem Datawind faces. An early version of the product was of lesser quality. Datawind accepted more than 2.5 million orders to buy the device when it was announced, and had no capacity to manufacture at that scale. It even took money from some customers and then delayed shipment to them by up to 12 weeks, owing to manufacturing problems. The company was criticized by the media in India.
Mr. Singh says that 80 percent of the prep aid orders have now been delivered, and those customers were given a higher-end unit at no charge. If so, Datawind could regain its credibility. Its next challenge is to meet a government order for 100,000 units, destined for India's schools, by the end of the year. After that, he expects to compete in an order for five million units for schools.
Inexpensive devices are likely to come to the United States and European markets with some of the hardware costs offset by advertising or by content sales through the device. “Google's Nexus 7 tablet is $199 now, but people are saying it will be a $49 device in a year or two,†says Ken Dulaney, an analyst with Gartner. “Content sellers will underwrite hardware costs, so that devices eventually end up being free to consumers.†Stacy Smith, Intel‘s chief financial officer, said his company expected to see such tablets, and will compete for the business.
Mr. Singh says his cost of assembly for a Ubislate is about $37, and he sells it to the Indian government for $40. He keeps the price low by using Google's free Android operating system and cheap semiconductors found in low-end cellphones. In addition, he says, his company figured out how to make its own touch panel to fit behind the liquid crystal display screen. The LCD is still manufactured by an outside company.
Eventually, he says, the government will equip nearly all of India's 220 million students with a tablet, along with low-cost Internet connections, and that other countries will follow. Printing and distributing books costs about $15 a year even in a poor country, so a device like the Ubislate that lasts just three years and offers a bigger range of possibilities can be competitive.
Those prices are significantly less than the One Laptop per Child computer, which as of 2011 had issued more than two million machines, costing about $200 each, mostly to the developing world. Those laptops, called XO, are manufactu red by Quanta Computer of Taiwan.
Big sales to schools can help underwrite the cost of a mass-market product for adults in India and elsewhere, at a slightly higher cost that is offset by ads or possibly things like phone companies offering devices to get people on calling plans.
Mr. Singh is a long way from that level of mass production, but another competitor is likely to flood the rest of the world with cheap tablets soon. That could lead to an explosion of novel applications, similar to the online car sales and recruitment business that are moving into Africa thanks to cloud computing. Datawind has sponsored an applications contest for students, which generated a point-of-sale system for street vendors, who make $100 a month or less.
Any rival would need a cheaper tablet to compete with Mr. Singh, or it could just get used to a lot of ads.
