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Why a $35 Tablet Would Never Succeed in the U.S.

By - Source: Tom's Guide US | B 69 comments

How unfair! India is getting its long-promised $35 tablet, yet we are spending $500 for an iPad.

I have to admit that I am dazzled by the media coverage of the launch of the Aakash, the world's cheapest tablet. It will cost $50 per unit for the Indian government, $60 in retail and possibly as little as $35 once the volume increases. When we are able to contain our jealousy, however, it's easy to see that this tablet is neither a discounted iPad nor a product that could succeed in the Western hemisphere, despite its impressively low price.

More than a year ago, when it was announced that India would be developing a $35 tablet, many of us were quick to question the ability to take such a device from an idea to a commercial product. In the end, we all know what happened to the OLPC, which was supposed to sell for $100 but finally sold for $190. The Aakash took a similar path, as the retail price of the device is now almost twice as high as the original target price.

The Aakash tablet is designed by Canada-based Datawind and comes with a 7-inch 800x480 pixel display, 256 MB of RAM, 2 GB of NAND flash storage and a 366 MHz Connexant processor. There is also an SD expansion slot with two versions. One has Wi-Fi only, whereas the more expensive $60 version has SIM card-based GPRS cellular connectivity.Datawind said that the total price of the base model is $38, but it is actually $50 when additional fees such as local taxes and a replacement warranty are included. The Indian government apparently guaranteed a purchase volume of eight to ten million units by March 31, 2012. The first 100,000 units will be built within the next six weeks in a factory in Hyderabad.

Higher-priced versions of the tablet will be coming to the U.S. in the future. This makes absolutely no sense to me. Would you buy a $35 or... Let's be realistic. Would you buy a $60 tablet that features the specs mentioned above? You may buy one, but I doubt that you would enjoy using it beyond the first few minutes. I need to expand on that.

Without having touched it, I am convinced that the Aakash is one of the best-designed computers I have seen in a long time – at least since Intel's bug-free computer. (That computer was offered in the early 2000s and was designed for rural Africa with features to keep insects out of the case. In addition, it could be connected to a car battery.) The Aakash tablet is a computer with a strong regional and cultural focus that caters exactly to the needs of a very specific group of people.

India has a population of about 1.14 billion people. The latest telecommunication data I could find from the Telecom Regulatory Authority of India indicate that 81 million of them, or 7 percent of the population, access the Internet today via wired or wireless devices. Only 9.45 million, or 0.8 percent of the population, have access to a broadband connection to the Internet. If only 7 percent of the Indian population access the Internet today (actually, the data go back to 2009), then we can conclude that Internet access is still a rarity in India. In comparison, 74.1 percent of people living in the United States access the Internet today and about 37 percent browse via a broadband connection, according to Nielsen.

It is clear that Internet access works differently in the U.S. than it does in India, and India will need, at least for now, different means to provide its population access to the Internet than does the United States. Let's go a little further by looking at wired versus wireless telecommunications in India.

The Telecom Regulatory Authority of India states that there were only 36.2 million wired phone connections in India in 2009. Keep in mind, there are 1.14 billion people – and only 3 percent have a wired telephone. The reason is the extent of rural areas in India, which has given the country a good reason to focus on wireless communications. According to the Telecom Regulatory Authority of India, there are currently 635.5 million active cell phone subscribers in India, which translates to a market penetration of 54 percent. People in India are used to paying way too much for their ability to communicate wirelessly (much more than we think we are paying for our communications). A typical smartphone in India costs about as much as it does in the U.S. – about $600 without a contract. However, the average income per capita in India is just $1,039 per year, which means that advanced communications via a mobile computer that is more than just a feature phone will require people in India to invest more than half of their annual income into such a device. Would you be willing to do that here in the U.S., considering that our current average income is $46,381 per capita?

There is a real need in India for a basic, low cost Internet device that may also serve as a cell phone – one such as the Aakash. An expenditure of $60 is about 6 percent of the annual per capita income in India, which is far more acceptable. It is comparable to about $2,800 here in the U.S. It isn’t cheap, but it’s better than $25,000.

In India, the Aakash almost certainly has a bright future. It perfectly fills a need and provides an affordable way to communicate and access information on the Internet.

In the U.S., it is a different story. You can imagine the first reviews with complaints about a terrible display, lack of storage space, slow processor and cheap materials. We have different expectations, and while it may be cool to own a $35 or $50 tablet initially, it has an older version of Android where you will need a vastly more capable device to run the applications in which you may be interested. There are no such expectations in India. You can't miss what you don't know, and you will be happy with it if it enables you to do more than you could before. The Aakash will enable millions of people in India to access the Internet – people who could not have previously afforded Internet browsing. Also, imagine the new ways of wireless communication it may facilitate.

A $35 or $50 tablet is what India needs today. In the U.S. this tablet would definitely fail.

Related:

India Unveils Ultra-Cheap $60 Tablet For Students

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Top Comments
  • 41 Hide
    captaincharisma , October 17, 2011 4:13 PM
    it wouldn't succeed because it does not have an apple logo on it an cost an insane amount of money.
  • 22 Hide
    nezzymighty , October 17, 2011 5:35 PM
    The title of the article is indeed "Why a $35 Tablet Would Never Succeed in the U.S." is it not.

    Very poor delivery on the article. You're nuts if you think a tablet at a cost of $35-50 with whatever lame spec won't sell for that price in the US. You can sell used clothing (underwear) on eBay in the US for that much. Many eat out at lunch at $10-15 per shot per day. Many rack up extra $50-60 on their cell phone per month because they went over their allotted plan time. And you think this product won't sell in the US? You've attempted to use stats to argue your idea that this tablet wouldn't succeed in the US. In fact, the stats you use have nothing to do with whether it can sell at all in the US. What do I care about per capita between the two countries! Where the heck does $25,000 dollars come into play? What does that have to do with selling the product in the US? Are you saying that we in the US are too good for this product, that we shouldn't purchase such a petty thing?

    The product is probably limited to poor web browsing, but you can count me in for a few. You think every parent can afford the typical $400-$500 tablet product that is sold here in the US, let alone parents that have a few kids. The economy still sucks, and many families are still defaulting on their mortgages. This is the perfect tablet that many parents have dreamed about for their young children. How many parents out there concede that their children, regardless of age, are rough with the things you've purchased for them. How many of you parents that can afford the $400-$500 tablet are cautious when you're little ones are around when using it?

    Like others have mentioned, poor school systems could make use of it. Not only that, there are industries out there that run customized linux applications/products for stock keeping, inventory tracking, JIT delivery to assembly systems, etc. I could see companies outfitting their workers in a store like Home Depot to check inventory on a product for a customer. You don't need a Tegra 2 to accomplish this. And typically, this product could act as a terminal to the main control/server. You think a company wants to spend $400-$500 over $35-$50 to accomplish the same goals? You think companies care whether Angry Birds is going to perform poorly on the tablet?

    What makes a good article is one that doesn't lead the audience to YOUR decision (especially when the facts don't even support the intent of the article), but rather provide the facts so that the reader can make their own. Stick to reviewing the product only.
  • 17 Hide
    CTT , October 17, 2011 5:03 PM
    captaincharismait wouldn't succeed because it does not have an apple logo on it an cost an insane amount of money.


    Ahahah, its funny cause its true. Slap an Apple logo on that bad boy and it'd sell like hot cakes.
Other Comments
    Display all 69 comments.
  • 41 Hide
    captaincharisma , October 17, 2011 4:13 PM
    it wouldn't succeed because it does not have an apple logo on it an cost an insane amount of money.
  • 4 Hide
    legacy7955 , October 17, 2011 4:19 PM
    I noticed that the writer mentioned that about 37% of the US population actually can access the internet via broadband connections, actually that sounds like the developing world to me. Oh wait I forgot the US actually has become the third world over the past couple of decades in almost every way.
  • 8 Hide
    de5_Roy , October 17, 2011 4:33 PM
    the tablet will not succeed in usa because of it's weaker hardware and how much more data u.s. users will need it to process. it might find a niche market or compete with low-cost e-book readers, lesser known tablets.
    if it catches on, it'll give dell streak some serious competition. i kid of course.
    don't think it can play crysis.
    with economy this bad, who knows...
  • 14 Hide
    Anonymous , October 17, 2011 4:36 PM
    I could see purchasing lower-end tablets, though more for specific uses.
    Not everyone needs to play videos and games.
    I'd purchase one to control my HTPC when the TV is off and I'm playing music
    Maybe have it in the kitchen with the weather, news, recipes, calendar, etc

  • 11 Hide
    rosen380 , October 17, 2011 4:44 PM
    "I noticed that the writer mentioned that about 37% of the US population actually can access the internet via broadband connections,"

    Re-read, he says that 37% DO access the internet with broadband. The difference is that probably somewhere around 80-90% CAN access broadband, but more than half of them CHOOSE not to.
  • 5 Hide
    LORD_ORION , October 17, 2011 4:46 PM
    All you need to do is market it as a mobile e-mail / instant messenger device.

    There are many people in the US who don't have or want a cell phone (because of the ridiculous telecom prices).
  • 3 Hide
    Device Unknown , October 17, 2011 4:47 PM
    I agree with your assumption. However, I do believe that in some circumstances that $60 tablet would be welcomed in America. Think of the impoverished school systems.
  • 17 Hide
    CTT , October 17, 2011 5:03 PM
    captaincharismait wouldn't succeed because it does not have an apple logo on it an cost an insane amount of money.


    Ahahah, its funny cause its true. Slap an Apple logo on that bad boy and it'd sell like hot cakes.
  • 3 Hide
    theuniquegamer , October 17, 2011 5:16 PM
    With proper advertisement and a popular brand logo ,all of it will be soldout in every market.BTW The tablet is available at INR 1200 i.e $24 for students in our state
  • 6 Hide
    anony2004 , October 17, 2011 5:21 PM
    Quote:
    A typical smartphone in India costs about as much as it does in the U.S. – about $600 without a contract.


    Well, this is certainly wrong as I live in Pakistan (and India and Pakistan are pretty much the same) and here an 'average' smartphone will cost you around $250-$300 not $600. Six hundred dollars here can fetch you a 32GB iPhone 4 and that certainly isn't average...
  • 9 Hide
    acadia11 , October 17, 2011 5:26 PM
    If you build it they will come. YOur argument is hogwash. The freaking Kindle is less powerful and sells like hotcakes and cost a ton more. We'd do just fine with it, to do the things most people do, google search, connect to face book, angry birds. The reality is we are a money grubbing wh0re of a society. And it wouldn't be successful because people might realize that business often grossly overcharges us for isht we don't need.
  • 0 Hide
    southernshark , October 17, 2011 5:35 PM
    37 percent is too high. I had DSL in Alsaka which ran at around 14.4kb speed. The government uses the same funny numbers here that they use for unemployment. If you have DSL you have broadband, at least in their minds. In reality DSL in rural areas is often extremely slow. So slow, in fact, that its only advantage is that you don't need a second phone lone to use it.
  • 22 Hide
    nezzymighty , October 17, 2011 5:35 PM
    The title of the article is indeed "Why a $35 Tablet Would Never Succeed in the U.S." is it not.

    Very poor delivery on the article. You're nuts if you think a tablet at a cost of $35-50 with whatever lame spec won't sell for that price in the US. You can sell used clothing (underwear) on eBay in the US for that much. Many eat out at lunch at $10-15 per shot per day. Many rack up extra $50-60 on their cell phone per month because they went over their allotted plan time. And you think this product won't sell in the US? You've attempted to use stats to argue your idea that this tablet wouldn't succeed in the US. In fact, the stats you use have nothing to do with whether it can sell at all in the US. What do I care about per capita between the two countries! Where the heck does $25,000 dollars come into play? What does that have to do with selling the product in the US? Are you saying that we in the US are too good for this product, that we shouldn't purchase such a petty thing?

    The product is probably limited to poor web browsing, but you can count me in for a few. You think every parent can afford the typical $400-$500 tablet product that is sold here in the US, let alone parents that have a few kids. The economy still sucks, and many families are still defaulting on their mortgages. This is the perfect tablet that many parents have dreamed about for their young children. How many parents out there concede that their children, regardless of age, are rough with the things you've purchased for them. How many of you parents that can afford the $400-$500 tablet are cautious when you're little ones are around when using it?

    Like others have mentioned, poor school systems could make use of it. Not only that, there are industries out there that run customized linux applications/products for stock keeping, inventory tracking, JIT delivery to assembly systems, etc. I could see companies outfitting their workers in a store like Home Depot to check inventory on a product for a customer. You don't need a Tegra 2 to accomplish this. And typically, this product could act as a terminal to the main control/server. You think a company wants to spend $400-$500 over $35-$50 to accomplish the same goals? You think companies care whether Angry Birds is going to perform poorly on the tablet?

    What makes a good article is one that doesn't lead the audience to YOUR decision (especially when the facts don't even support the intent of the article), but rather provide the facts so that the reader can make their own. Stick to reviewing the product only.
  • 2 Hide
    maigo , October 17, 2011 5:37 PM
    We have different expectations for our portable tech. Mainly Angry Birds, HD vids on the youtube, all our music and bling
  • 0 Hide
    Anonymous , October 17, 2011 5:39 PM
    If apple built it, it would be better. The software stack would be designed for the limitations and the app store requirements would reflect that.

    As somebody else mentioned, there are devices like the kindle that are cheap and can't do alot that do just fine. It's about setting expecations and making them good at what they are meant for.

    If the screen and battery life are half decent you could use it as e-reader. Should be able to make some optimized email clients, rss readers, etc. Maybe a facebook client that's lite on pictures/media.

  • -2 Hide
    noblerabbit , October 17, 2011 5:41 PM
    It's very simple, if it doesn't have an Apple Logo and Applie IOS, and doesn't cost 800$ / yr to own, then no one in America would buy it!
  • 7 Hide
    Sunfighterlc , October 17, 2011 5:46 PM
    We already have a cheap alternative tablet in the United States. Its called an Etch-a-Sketch.
  • 5 Hide
    ojas , October 17, 2011 5:49 PM
    anony2004Well, this is certainly wrong as I live in Pakistan (and India and Pakistan are pretty much the same) and here an 'average' smartphone will cost you around $250-$300 not $600. Six hundred dollars here can fetch you a 32GB iPhone 4 and that certainly isn't average...


    I couldn't agree more. $600 may be average for you Wolfgang, since we all know you love apple.
    The average smart phone costs $250, most people in cities have one that costs $200 and rural folk don't usually have smart phones. The average phone they buy costs between $15 to $100. And most of our country is on pre-paid services, and pay about $2 for unlimited text messages and $0.002 per second for calls. I pay $0.002 for each SMS and $0.01 per minute for calls on a post paid connection.

    Quote:
    People in India are used to paying way too much for their ability to communicate wirelessly (much more than we think we are paying for our communications).

    So I'm really at a loss to understand what you're talking about. It's not like you NEED an iPhone to be able to call someone.
  • 13 Hide
    runswindows95 , October 17, 2011 6:02 PM
    $50 for an E-book reader? I'll buy one!
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