(Originally written for DNA, Bangalore Saturday edition)
Did you think the proposed $35 tablet by the Ministry of Human Resource Development (MHRD) is not practical? Did you tweet, post Facebook messages or blog about the ‘ridiculous pricing’? If yes, be ready to swallow your words or delete those posts. A Bangalore-based company, AllGo, has also come up with a design for a similar tablet device, which it has priced at $47.
The cost of the device displayed by Union HRD minister Kapil Sibal is also $47. The ministry believes it can bring down the price to $35 or even $10.
Amith Srinivas, AllGo’s senior business development manager, said the company decided to develop the tablet six months ago. AllGo’s device, which is independent of the government initiative, has an ARM9 processor at its heart on a Freescale i.MX233 board.
“We had made designs for specialised devices such as potable media players, photo frames etc. We thought of making it an affordable, cost-efficient tablet later,” said Srinivas. AllGo works on embedded solutions and it will not manufacture the tablet device.
“The tablet is not suited for heavy-duty work. It’s for people who are planning to do basic work like e-mail, music and video playback, among others, and is similar to the kind of functionality the government is expecting from such a device,” added Srinivas.
The device has a 7-inch screen, three USB ports, Ethernet and 128-MB internal flash memory (expandable up to 2GB using a Micro-SD card and running on Android 1.6). The device could cost $50, after including margins, if the order hits the 10,000-mark. The price can be reduced further if the order is close to 1lakh, according to Srinivas.
How did the company manage to bring down the cost to $50 when even smartphones are not available at that price? It can be done by sourcing components from China and keeping a minimal margin. Srinivas said India still lacks an “ecosystem” to create such a low-cost device on a large scale, hence, the device would be manufactured in China. “Labour charges are cheap in China. Also, there are companies with manufacturing set-ups for such devices,” he said.
However, manufacturing the product in China opens a can of worms in the form of import duty, VAT and taxes. This could increase the price of by up to 30 per cent. “The price mentioned by the government for its device factors in manufacturing the device in China. We’re assuming the government will not charge these taxes for its device,” said Srinivas.
It is not clear if the HRD ministry would extend the exception to private players as well. AllGo submitted a proposal to the ministry for a similar product showcased by the ministry six months ago and have been in talks ever since. The company plans to approach private companies to manufacture the device if the deal with the ministry does not work out.
The device was never meant to compete with an iPad and never will in its present form, said Srinivas. However, the company is planning to make a high-end version of the device for better performance. The current development unit — displayed at various events overseas — does a good job of handling basic work, but might stutter because of the slower processor, in comparison to devices like iPad.
Unlike the $10-laptop the government wanted to build a year ago, tablet devices might be available in a year’s time, thanks to the presence of private players like AllGo and the HRD ministry’s tie-ups with educational institutions.