India's $35 tablet computer: Will prices dive further?

It’s an exciting time to be a tablet computer shopper in India. In the past few months, there have been a slew of tablet devices aimed at price-conscious consumers.

Following that trend, now there’s news the world’s cheapest tablet computer will go on sale in India at $35 (Rs 1,750) apiece from December. This particular model, however, is aimed particularly at students, and is the result of a collaboration between the government and IIT Rajasthan. The tablet will be manufactured by Datawind, a UK-based company that is known for manufacturing the Pocketsurfer, a hand-held device to surf the web, according to The Economic Times.

The tablet costs around Rs 3,000 to manufacture, but the price difference will be paid by the government as part of an ambitious plan to make information and communication technologies an integral part of education.

The tablet will run on Google’s Android platform, have WiFi capability for Internet access and cloud storage. It will have 256 MB of RAM, a 2GB SD memory card, a 32 GB expandable memory slot and two USB ports.

For those of you who are disappointed that the $35 gadget will not be aimed at the mass market, fret not, because the competition to win customers with relatively cheap tablets looks all set to intensify.

According to a media report, Iberry, a Hong Kong-based tablet device manufacturer, plans to launch two tablets that are tipped to become the new cheapest tablets in India.

A 7-inch model will retail for Rs 6,990 while another 10-inch model will be priced at Rs 14,990. Both devices will be based on the Android 2.3 (Gingerbread) operating system and will be capable of handling up to 32 GB of expandable memory via Micro SD cards. The gadgets will go on sale from October 10.

The iberry devices will challenge Beetel’s Magiq (Rs 8,999), which is currently the cheapest mass-market tablet available in the country. Of course, there are other low-cost Android tablets as well such as Mercury’s mTab (Rs 9,499), Reliance (Rs 12,999) and MSI Energy’s 7 and 10 (Rs 14,999 and Rs 13,999, depending on size).

Yet, India is a very nascent market and the competition has only just begun. In the nine months to June, nearly 158,000 tablet computers were sold in the country, according to this report . Samsung led the market with a 46 percent share, followed by BlackBerry (21 percent) and Apple (18 percent). Shipments are expected to climb to 275,000 units by the end of December.

Tablet computers are now available in India at prices ranging from Rs 8,000 to Rs 47,000. Yet, experts say that for the tablet to become truly mass market, tariffs for high-speed data services need to be brought down.

Indian firm Olive Telecommunications fired the starting shot in the tablet war by launching the Olivepad in July 2010, which was followed by Samsung’s GalaxyTab. Apple’s iPad made its Indian debut in January 2011. In the first quarter after its debut, Apple managed to eke out a measly 6 percent market share , even as the Galaxy Tab ran away with a whopping 85 percent market share.

As you can see, the gap between Apple and Samsung narrowed by the end of June. With the entry of even more price warriors, the tablet market is likely to see a further shakedown in terms of market share. Yet, don’t expect Apple to emerge as a winner from Samsung’s loss. Even globally, Apple is feeling the bite of competition. From a 94 percent global share in April-June 2010, Apple’s lead has now fallen to 61 percent. Samsung, being the market leader in India, is also heading for a similar fate. Next year, this time, another company could be driving tablet sales in India.

With their competitive prices, the new rivals have opened a whole new mass-market in India. The $35 computer, if it takes off, will serve to reinforce that trend.

The real winners in all this, of course, are the Indian consumers.