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How a $20 tablet from India could blindside PC makers, educate billions and transform computing as we know it
The Aakash 2 isn’t just the cheapest fully functional tablet PC on the planet because the Indian government has decided it should be—it’s the cheapest, period....the ultimate price university students will pay for [this] tablet, after half its cost has been subsidized by the Indian government, is $20.
Ubislate - the commercial version of the Aakash 2 (Aakash means "blue sky")
Disrupting the world’s largest tech companies
“The revolution will come from the developing world to the US,” says Vivek Wadhwa, an entrepreneur and academic. “These tablets will kill the markets for high-end players—for Microsoft in particular.”
Wadhwa knows Tuli and has become the Aakash 2′s champion stateside, writing about the device and getting it into the hands of executives. He believes that the $40 price of the tablet could drop to $25 within a year. “I showed a Google executive [this] tablet. He suddenly realized that his $99 tablet isn’t going to stand up to the $25 tablet from India.”
Many in Silicon Valley are suddenly fixated on cheap tablets. “I see a lot of the PC makers and hardware companies here [in the US] are going to build a tablet strategy,” says Jay Goldberg, a financial analyst who was surprised to discover on his last trip to China just how cheap functional 7″ tablets have become. “But if there are already $45 tablets out there, even that second-tier strategy [of replacing lost PC sales with tablets] is going to fail.”
Everyone I interviewed for this piece thought that Apple, as a company that differentiates itself by being a high-end brand, would survive the coming of cheap tablets. But Goldberg and Wadhwa agreed that other manufacturers of Android-based tablets, even Samsung, would have a hard time staying in the hardware market.
Free tablets and ubiquitous computing
“[In the US,] you will see tablets everywhere,” says Wadhwa. “They will become disposable, and you will see thousands of new applications within a short period of time.”
Tuli thinks he can eventually bring the Aakash 2 to the US at a $50 retail price, and if trends continue, that price will continue to fall.
It doesn’t take much imagination to think of applications for devices that cheap. “If I were to start a company today, I’d say what kind of a business can I build if the hardware is almost disposable?” says Goldberg. “In a restaurant, if every waiter or maitre d’ has a tablet, now someone can go build a good restaurant automation tool that links tablets to the chef station.”
At some point, too, any company that can squeeze enough ads onto this class of tablets will start giving the tablet away for free. (Remember when USB thumb drives became inescapable promotional giveaways?) The commercial version of the Aakash 2, the $70 Ubislate, affords Datawind almost no profit margin at all. But, like Amazon and Google, which have adopted a business model of selling their hardware at cost and making money on content instead (Amazon by selling e-books, and Google by selling ads), Datawind is using Yahoo’s ad marketplace to sell advertisements on the toolbar of apps on the Ubislate.
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Originally Posted by Steven Douglas
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