Sun, Dec 12, 2010 - Page 11 News List

High hopes and hard realities for US$35 computer

By Pratap Chakravarty  /  AFP, NEW DELHI

The Indian government won headlines around the world when it unveiled a prototype US$35 tablet computer in July, but questions are now growing over whether the project is just a pipe dream.

At the computer’s launch, Indian Human Resource Development Minister Kapil Sibal vowed “the solutions for tomorrow will emerge from India” as he revealed the breathtaking price tag — a fraction of the US$500 cost for an Apple iPad.

Officials said the touchscreen device, aimed at the country’s millions of students, could even be hammered down to just US$10 once production rates increase.

The tablet computer, which has yet to be named, is billed as boasting a three-hour power back-up, Internet browser, media player, video-conferencing capability, good data storage, hard disk drive and Webcam.

“The price includes a small component of profit for the manufacturer and hence higher volumes will fetch more returns,” Sibal said. “This low-cost device is likely to revolutionize the education system in our country. It will have a very positive impact on our literacy campaign.”

However, Indian promises of a “laptop for the masses” have hit the buffers before. The government said it was on the brink of putting the computer on sale in both 2005 and last year — only for the much-hyped product never to materialize.

Terry Thomas, a partner in the local arm of global audit firm Ernst & Young, is among those striking a note of caution.

“A computer with all normal functionalities at this price will not be sustainable unless it is subsidized by the government or the industry,” he said.

Thomas suggested a “stripped-down version” with a bare minimum of facilities could perhaps be engineered at nearer the advertised cost, though users would likely be unimpressed.

The first 100,000 computers are slated to be released as soon as January, but details of its exact specifications are still scarce — as is the level of government subsidy that will be essential to keep the price down.

Experts have also warned the device could struggle with issues such as cheap imports and India’s rising labor charges.

“If one takes out the cost of labor then the cost of materials like plastic and silicon will have to be virtually nothing,” said Joydeep Bhattacharya, of the Indian unit of US computer giant Hewlett-Packard.

The motherboard of a prototype cost US$47 alone, Sibal’s ministry said in a statement earlier this year, claiming it was still possible to cut costs.

Sibal hopes that 10 million of the computers will be manufactured within 12 months of the first one coming off the production line — an ambitious target by any measure.

Just months before the first models are due in public, the government has been determined to keep its manufacturers a secret.

The Delhi-based Manufacturers’ Association of Information Technology (MAIT) stressed that government subsidies may not be able to guarantee the US$35 price tag (about 1,600 rupees) against market pressures.

MAIT executive director Ashwani Aggarwal said he wondered if the price included taxes, transportation charges and delivery costs and he said not enough thought had been given to potential users.

“Parallel to the cost factor, serious effort must be put into triggering demand through programs that deliver easy finance to students,” Aggarwal said.

India, whose 61 percent literacy rate lags far behind many other developing nations, such as China with 92 percent, is making major efforts to improve its education system.

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