7-inch-Allwinner-tablet.jpg

The $45 tablet

In an interesting ZeroHedge article on why innovation premiums are diminishing, there is a link to “Hardware is Dead“, a venture capital article from last September which talks about a recent trip to China:

This consultant pointed me to a mall filled with hundreds of stalls selling n…

  1. flownover

    I used to be in wholesale distribution and when my company bought another company, which happened to have an electronics division, I reveled in the fact that I could buy a Betamax for $ 750.00 .

    Schumpeter ? Where are you ?

  2. Lord Humungus

    And the investors, mustn’t forget the investors.

    Is hardware really dead? They say that your next tablet will be free, but loaded up with advertising and hardwired sales apps – think Amazon.

    So textbooks will be delivered to the kiddies on their MTV tablets, or something like that.

  3. BlueAnt
    Central Scrutinizer: And the investors, mustn’t forget the investors.

    Is hardware really dead? They say that your next tablet will be free, but loaded up with advertising and hardwired sales apps – think Amazon.

    Some reference points:

    I bought my Amazon Kindle 2nd edition in 2009 for $360.  The same functionality is now available for $139 with ads, or $159 without ads. Lower end Kindles go for $69.

    The 10″ tablets I bought last year cost $150 each.  You can now get roughly similar ones from the same site for $102.

    So hardware isn’t going away, but the profit margins are.  New players won’t be able to make a buck off of shiny, incrementally better design, unless they are already an established name.

    One possible exception:  my niece just received a Nabi tablet for Christmas.  It cost $200, has an indestructible plastic body with thick rubber sides, and she absolutely loves the learning games on it.

    So the heavily curated experiences in a ready-to-go package may get you a premium (see also:  Apple).  But for consumer hardware, it’s go bulk or go broke.

  4. Lord Humungus

    They’ve been saying that for years (a lot of years actually), but there’s always something new, always something different. And there’s margin on hardware, manufacturer’s recoup it differently – that’s part of the equation anyway, and yes, it’s go bulk or go broke.

    But, let’s get philosophical, since you brought up AAPL. Is AAPL a hardware company? Software? The lines are blurred now to the point that the hardware is nearly indistinguishable from the software (the heavily curated experience).

    It’s funny. I can remember when software was going to revolutionize engineering by making design and development easier (it’s so much easier to change a line of code than a resistor they said). Oh boy how wrong they were. Turns out that maintaining code is at least as difficult as maintaining hardware.

    Which of course leads us to the 787 Dreamliner’s story.

  5. BlueAnt
    Central Scrutinizer: 

    But, let’s get philosophical, since you brought up AAPL. Is AAPL a hardware company? Software? The lines are blurred now to the point that the hardware is nearly indistinguishable from the software (the heavily curated experience).

    They’re a dinosaur from another era:  a proprietary technology company, the last of the fully integrated “stacks”.  The irony of Apple is that they are not actually pushing hip new models, they are old.

    If you want to know where that’s heading, IBM is a good case study.

    It’s funny. I can remember when software was going to revolutionize engineering by making design and development easier (it’s so much easier to change a line of code than a resistor they said). Oh boy how wrong they were. Turns out that maintaining code is at least as difficult as maintaining hardware.

    Hoo boy, don’t get me started down that road…

  6. TheRoyalFamily

    If I had $60, I’d get it, just to see what the heck is up with this thing.

    I’d use a prepaid visa card or something, though, not my debit card…

  7. Valiuth

    I looked at the tablets features as listed on the website. This is a seriously weak device. You can buy a Galaxy Tab 7 for only like 150$ but the device is easily 3 times better. Now if you found a Chinese knock off of American market products you can usually save like 50% or more. 

  8. M. T. S.

    “But the praise should be reserved for the manufacturers, entrepreneurs, and businesses which made such technology cheap enough to even be considered in the first place.”

    And the rich 1% who bought them when they were thousands of $, keeping the businesses alive to be able to continue develop the tech and eventually reduce costs.

  9. BlueAnt
    Valiuth: I looked at the tablets features as listed on the website. This is a seriously weak device. You can buy a Galaxy Tab 7 for only like 150$ but the device is easily 3 times better.

    The Galaxy Tab certainly is 3x better… but does everyone need that in their device?

    The $45-$60 tablet is too weak to play 3D games, or a couple of the more involved 2D games.  But it will play most games, and movies, and surf the web, play YouTube videos, check mail, get you on Facebook, edit documents, and run most specialized apps you might need on a tablet.

    The waiters scribbling orders, the mechanics writing up estimates, and the doctors pulling up medical records don’t need a Tab’s power for such mundane tasks.  And if their tablet breaks in their physically chaotic workplace, they don’t want to spend another $150 to replace it.

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