More applications and content will make low-cost computing more relevant to consumers. But cost is crucial too. Many expect Mukesh Ambani to be a game changer. ET recently reported that Reliance Industries will unveil a new range of 4G-enabled tablets at 3,000. Such a price point would have been ridiculously low even one year ago. But prices of components like the hard disk, RAM etc have come down enabling manufacturers to come out with innovative offerings. Says NIIT's Thadani: "The real breakthrough has come from Moore's Law: processor power doubles every 18 months and costs come down. There's more power packed in each new generation of computers." Alok Bharadwaj, the president of , Manufacturers Association of Information Technology (MAIT) attributes low cost computers to economies of scale and an average decline of 15% a year in component prices. Adds Apratim Sharma, country product manager, Asus India: "We observe 15-20% yearly drop in cost of same hardware'. You can get a hard disk that went into high end laptops 2-3 years back at lower costs in netbooks or tablets now, he adds. Asus just launched a 10 inch net book at 9,999 with a 250 GB hard disk, 1GB RAM, web cam, WiFi and Bluetooth. "Three years ago a similar device would have cost double," he adds. NIIT's Thadani still remembers the first PC they bought back in the 1990s. It cost 1.5 lakh. It had 10 MB hard disk and 5 MB RAM. "Now, you get a far more richer device for less than 10,000," he adds. Last week HCL Infosystems launched a 10,490 tablet complete with a touch screen, 1 Ghz processor, 2 MP camera and 512 MB storage. Says Harsh Chitale, its CEO: "Now, with more value at lower costs computing in India will take off in the next 12-18 months. Tablets could do to computing what sub- 5,000 phones did to telecom." Computer penetration in India is very low and tablets account for just 2% of PC sales. "Once you have a device priced at six to eight weeks of annual income, computer adoption will take off," says Prashanth Adiraju, director, new platform business group, Intel Technology India. "We are at that stage now." He believes that 90 million households in India can now afford buy a computer with less than a month's income. Ten thousand rupees is emerging as the new price point for netbooks. But tablets are becoming available at even lower costs. A typical low cost tablet would come with a 7 or 10 inch touch screen, a free operating system, fast processors, graphic cards and internet connectivity. Datawind, a Canada based company that launched the $35 (about 1,750) Aakash tablet (subsidised by the government for students), says the actual cost is $49. Datawind has been able to get it at this price point due to cheaper hardware and free OS, Google's Android 2.2. Google gives the OS free and makes money via user downloads. Says Suneet Singh Tuli, CEO, Datawind: "Prices have come down due to open processor architecture. Earlier it was an Intel-AMD monopoly." At present the screen is the most expensive part-about 22-25% of the cost. Though costs may not decline further, performance could improve a lot more. "It's like a 100 meter race. After hitting these levels ($35) there's very little room for further price cuts," says Rachna Nath, executive director, PricewaterhouseCoopers (PwC). "But each new version will come with better hardware at similar or lower costs." Adds ITC's Sivakumar: "Functionality of today's devices is far superior to the options available earlier." And this will only get better. "Telecom backbone is also more evolved today."
Thursday, December 29, 2011
TECH SPECIAL ...The Age of Low Cost (3)
More applications and content will make low-cost computing more relevant to consumers. But cost is crucial too. Many expect Mukesh Ambani to be a game changer. ET recently reported that Reliance Industries will unveil a new range of 4G-enabled tablets at 3,000. Such a price point would have been ridiculously low even one year ago. But prices of components like the hard disk, RAM etc have come down enabling manufacturers to come out with innovative offerings. Says NIIT's Thadani: "The real breakthrough has come from Moore's Law: processor power doubles every 18 months and costs come down. There's more power packed in each new generation of computers." Alok Bharadwaj, the president of , Manufacturers Association of Information Technology (MAIT) attributes low cost computers to economies of scale and an average decline of 15% a year in component prices. Adds Apratim Sharma, country product manager, Asus India: "We observe 15-20% yearly drop in cost of same hardware'. You can get a hard disk that went into high end laptops 2-3 years back at lower costs in netbooks or tablets now, he adds. Asus just launched a 10 inch net book at 9,999 with a 250 GB hard disk, 1GB RAM, web cam, WiFi and Bluetooth. "Three years ago a similar device would have cost double," he adds. NIIT's Thadani still remembers the first PC they bought back in the 1990s. It cost 1.5 lakh. It had 10 MB hard disk and 5 MB RAM. "Now, you get a far more richer device for less than 10,000," he adds. Last week HCL Infosystems launched a 10,490 tablet complete with a touch screen, 1 Ghz processor, 2 MP camera and 512 MB storage. Says Harsh Chitale, its CEO: "Now, with more value at lower costs computing in India will take off in the next 12-18 months. Tablets could do to computing what sub- 5,000 phones did to telecom." Computer penetration in India is very low and tablets account for just 2% of PC sales. "Once you have a device priced at six to eight weeks of annual income, computer adoption will take off," says Prashanth Adiraju, director, new platform business group, Intel Technology India. "We are at that stage now." He believes that 90 million households in India can now afford buy a computer with less than a month's income. Ten thousand rupees is emerging as the new price point for netbooks. But tablets are becoming available at even lower costs. A typical low cost tablet would come with a 7 or 10 inch touch screen, a free operating system, fast processors, graphic cards and internet connectivity. Datawind, a Canada based company that launched the $35 (about 1,750) Aakash tablet (subsidised by the government for students), says the actual cost is $49. Datawind has been able to get it at this price point due to cheaper hardware and free OS, Google's Android 2.2. Google gives the OS free and makes money via user downloads. Says Suneet Singh Tuli, CEO, Datawind: "Prices have come down due to open processor architecture. Earlier it was an Intel-AMD monopoly." At present the screen is the most expensive part-about 22-25% of the cost. Though costs may not decline further, performance could improve a lot more. "It's like a 100 meter race. After hitting these levels ($35) there's very little room for further price cuts," says Rachna Nath, executive director, PricewaterhouseCoopers (PwC). "But each new version will come with better hardware at similar or lower costs." Adds ITC's Sivakumar: "Functionality of today's devices is far superior to the options available earlier." And this will only get better. "Telecom backbone is also more evolved today."
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