$10 Tablet PC, Why Not?

Its interesting to note the comments on the $35 tablet PC from India. Most folks are going “VAPORWARE”… but I dont think so, nor do I think the $10 tablet PC is an impossibility. Now in all fairness, the capabilities of a 2Watt, 256meg ram, and a 2gig flash disc computing device are going to be much much less than even the most basic Ipad. On the other hand, if one has a wordprocessor, spreadsheet, graphics program, limited multimedia, and web connectivity (and such programs were not bloatware)… realistically, short of gamers, such likely would meet the needs of the vast majority of computer users.

The question then becomes how can this happen… most of the blog commentors are going its labor. Well, perhaps development labor, but realistically, in volume production of technical devices, labor often pails in comparison to material costs and overhead.

A friend who used to run a contract manufacturer said he could compete with China any day, if it were not for his costs of capital and the US tax code in contrast with China’s subsidies of capital equipment when it came to pick and place operations.

In a lot of cases, overhead becomes a dumping ground for accounting games. In other cases, overhead is an under the radar way for folks to skim right off the top. Case in point, for the average US product produced in other than vertical integration methods, taxes passed along from vendor to vendor and subcontractor to subcontractor end up multiplying, such that a 15-25% hit overall is not unrealistic. On the other hand, the cost of labor and capital for state of the art vertical integration would be even higher. Ie, if you need a $9 billion fab, to ship 100 million units over a products life cycle… well at a $90 hit + interest+investor returns per unit… its not going to fly.

By the same token… how about a $1 million dollar fab to ship 100 million units. Namely an older 200mm, lower density process to make low cost parts. I’ve seen 100mm fab gear sell for microcents on the dollar. The same with the mechanical side. I remember in my younger days, a buddy sold a 20 ton injection molder for its scrap value.

System integration is another thing to consider. Back in the Apple II plus days, and while crude by todays standards, millions of pages were written on Apple II plus word processors. In 1982, I even had a Hayes 300 baud modem on an Apple II plus wired up to the cable tv audio channel so we could send files back and forth between schools. We also had pong and tetris. Now the Apple II plus of that era had a massive PCB with a kazillion socketed 16 pin dips, had 48K or memory and cost almost as much as a used car. In 2004, we built up a demo unit with a Atmel Mega 128, which also ran tetris, had a keyboard interface, and without too much hoop jumping could also be a webserver. It was a 64 pin TQFP, with 128K of flash and it sold for under $20 for qty 1. Granted the LCD we used was 6x the cost of the processor at qty 1.

As a result… mature parts and processes, vertical integration, and significant automation, combined with modest govt subsidies for the necessary capital equipment, and $10 doesnt seem unreasonable at all. Just dont expect all the bells and whistles of an ipad.

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