"Apple and Samsung will have
to change their game"


"Apple and Samsung will have to change their game""Apple and Samsung will have to change their game"

Opinion: Justin McGuirk's inaugural Opinion column for Dezeen is in two parts - in this first instalment he examines what cheap tablet computers developed for emerging markets like India will mean for high-end tech giants like Apple and Samsung. Tomorrow he'll ask why design critics are writing about technology in the first place.

Apple's launch of a cut-price iPhone last week – complete with blanket media coverage and the requisite 5am queuing by obsessives – was a reminder of what an insular world the tech industry is. With a starting price of £469, even the budget version of the iPhone is well beyond the means of most people on the planet. This fact hit home a few days later when I went to hear Indian entrepreneur Suneet Singh Tuli speak at the Victoria & Albert museum in London. Tuli is the man behind the Aakash tablet computer. The Aakash 4 launches soon and, though it has greater processing power than an iPad, it is ten times cheaper with a price tag of just £40.

Given Silicon Valley's self-professed faith in the socially transformative power of technology, why does it show so little interest in trying to reach those who are most socially disadvantaged? The obvious answer is because the socially disadvantaged have no money. Yet, if you imagine reaching a market of a billion people who may be able to muster £40 for a tablet that will connect them to the internet – "the most powerful medium society has ever seen," as Tuli puts it – you'd think there would be enough of a financial, let alone social, incentive.

Tuli, the Punjab-born and Canadian-educated CEO of Datawind, headquartered in London's North Acton, can see the potential. He has his sights on the three billion people who have cell phones but no access to the internet. The barrier to entry, as he sees it, is not network coverage but price. Smartphones and tablet computers are out of their league. And yet, even in the US, personal computers only became commonplace once their price had dropped to roughly one week's salary, which happened in the 1990s. That fact made Tuli realise that in order to reach the billion people living on less than £150 a month, he would need to create a tablet that retailed for about £30.

The way Datawind approached that goal was by embracing the concept of making something "good enough". "Inexpensive and good beats expensive and great," says Tuli. If that sounds like he's damning his own product with faint praise, let's remind ourselves of just how much we have all bought into the concept of "good enough". We abandoned CDs for MP3 files, we watch pixellated videos on YouTube, we snap away with our phones even though we have digital cameras and we arrange Skype meetings knowing full well that the phrase "I've lost you" will feature prominently. In short, we favour convenience and instant gratification over high fidelity.

So, having briefly handled an Aakash 4 – or an Ubislate as it's known in western markets – I can tell you that its shell is not as finely wrought as an iPad's and its interface not as graceful. It does, however, have a 1.5 GHz processor that is more powerful than the latest iPad's. Tuli abandoned some common tablet features, like an HDMI port, "because my customers don’t need to be able to hook up to a big plasma screen, so there’s no point spending an extra 11 cents on that port," he says. Big deal.

The question you're probably asking yourself is, why does India's largely rural population need of one of these things? Tuli's answer is education. Of the 360 million children in India, only 219 million of them are in education. That's twice the population of the UK not receiving any schooling, and many millions more are being taught to a substandard level. India has a shortage of qualified teachers and the qualified ones are not desperate to work in rural villages.

I'll confess that I was sceptical at first. I do not believe that a tablet computer replaces a teacher. Connect a child to the internet and you offer her a wonderful support system, but who's to say what that child is actually doing online? "We need to connect them to the power of the MOOC [massive open online course]," says Tuli, not altogether convincingly. However, when he pointed out that the Indian government can supply Aakash tablets for less than it costs to print the necessary schoolbooks, I started to get the message. Indeed, Tuli claims the government is working on plans to distribute 220 million tablets - one for every student in the country.

But is the Aakash just another false promise? Yves Behar's One Laptop Per Child programme seemed to offer the same potential, was feted by a wide-eyed media and scooped up awards, but ultimately failed to live up to expectations. Part of the problem was that it never actually reached its targeted $100 price tag, but there were also frankly discouraging tales of Cambodian villagers using the OLPC as a lamp. "It turns out the killer app was light,” says Tuli, with no little schadenfreude. It turns out that he may well end up collaborating with OLPC on the educational programme, though.

So what makes the Aakash different? Is Tuli just another techno-determinist who’s imbibed too much of the Silicone Valley Kool-Aid? Worse, is the social agenda a convenient cover for what is ultimately an entrepreneurial venture? Now that I come to think of it, how does he make these tablets so cheap in the first place? The Kindle Fire sells at £129, which is £30 less than it costs to manufacture - money Amazon can afford to lose because what it's really selling is not hardware but content. Yes, Tuli cut out the unnecessary ports and features, and he negotiated a good deal on the touchscreens (the most expensive part of any tablet) but the Aakash still seems to do most of what an iPad can do, so there is presumably some very cheap labour going on that he has failed to mention.

Let's put that aside for now, along with any qualms about the environmental impact of a billion tablets, which Tuli calls "a necessary evil" in comparison to battling illiteracy and ignorance (which I think he may be right about). Looking at the big picture, we see a massive emerging market for devices that will connect people to the knowledge resource that is the internet. India, where 800 million people use cell phones but can’t go online, is such a market. In 2011 Indians bought 250,000 tablets (mainly Apple and Samsung). The following year it was more than 3 million (mainly Aakash). In fact, Datawind fell far short of being able to keep up with demand.

Apple and Samsung may not have time for this market but they should be worried by it, because Indians are not the only ones interested in a £40 tablet. In fact, Tuli was swamped after his lecture. It's customary at these things for a few keen audience members to mill around with an extra-time question, but this was fully half the lecture theatre. People were crowding round for a glimpse of this gadget. It was not their social consciences that drove them forward but pure consumer instinct. The air was heavy with musk.

Soon, Canadians will be able to buy an Ubislate for 37 Canadian dollars. If it's "good enough" for them, then companies like Apple and Samsung will have to change their game rather fast. It will also suggest that India is now the place to look for disruptive innovation. The warning signs are already here. Last week Microsoft bought back £24 billion of its own shares. Earlier this year, Apple bought back £62 billion of shares. Instead of investing their cash in research, they're giving it away to their shareholders. That, according to business thinkers like Clay Christensen, is the beginning of the end. As he said on the BBC's Newsnight programme last week, "Nokia is essentially gone, Blackberry is essentially gone and now Apple is next."

For once, those catering to the so-called "other 90%" stand to gain. "Three billion users should be a big enough market but the big companies don’t want to go near it," says Tuli. "That's why disruption happens."

Read part two »

Justin McGuirk is a writer, critic and curator based in London. He is the director of Strelka Press, the publishing arm of the Strelka Institute in Moscow. He has been the design columnist for The Guardian, the editor of Icon magazine and the design consultant to Domus. In 2012 he was awarded the Golden Lion at the Venice Biennale of Architecture for an exhibition he curated with Urban Think Tank.

  • Damian

    The Chinese are buying Volkswagen over great wall, why should that not be the case with tablet computers in India.

  • brih

    I seriously doubt that the tablet will be available for £40 in the UK, shipping and duty will take care of that. I don’t believe the figure of 37 Canadian dollars (£24!!) either, can this be confirmed?

    Other than that, it is a great article and it will be interesting to see how the company performs. The market is enormous, not just in India; think Africa, Central America etc. The Chinese will probably reverse-engineer it and produce it even cheaper though!

  • Darren

    Great insight on technology and emerging country, especially on the part on environment impact vs illiteracy and ignorance (I am sure that education would play a big role in social responsibility).

  • Floong

    Very interesting idea, good luck Mr Tuli. But I think that Samsung are looking into the emerging market sectors of Africa, India, etc. Not with smartphones, tablets per se (yet), but they do sell a lot of phones, a model or two back from a smartphone in those markets.

    In the past, Sony, for example, never really focussed on emerging markets so much (not a lot of money) but Samsung have done so, so they may be better placed than many think with more advanced gadgets being later introduced (with brand reputation established and ‘known’) as an economy develops. They’re certainly better placed than Apple in this regard.

  • greg

    This guy https://www.youtube.com/watch?v=6dyA8Ae92Os
    was talking about this ages ago.. haha

  • shaurz

    Some Chinese manufacturers are making tablets for $60 now so the price doesn’t surprise me. Quad core chips from Rockchip, et al. are now commonplace and very cheap.

  • This seems like a slightly confused post. Firstly it seems like the Apple and Samsung title is designed to make people read an article regarding a low cost tablet. The idea of a tablet for developing markets is great but seems to have tenuous links to Apple and Samsung. Whilst discussing the tablet it falls into the trap of talking about GHz and HDMI ports etc but not any kind of experience of using the device.

    A number of things aren’t very well researched outside of the mainstream media (Guardian / BBC). Firstly the iPhone C isn’t a low cost phone, it’s a lower cost phone, but not competing on price. This is a useful article to explain that theory. http://stratechery.com/2013/the-550-iphone-5c-makes-perfect-sense/

    It’s worth noting that Apple has never competed on price but on quality. The race to the bottom doesn’t help anyone and using similar arguments that held true in the PC wars of the 80s and 90’s don’t really apply here. How did Dell get on competing on price? They’re taking themselves private to avoid issues with their tumbling share price.

    The theory of disruption by Clayton Christensen is neatly taken apart in this post, especially his theory of low end disruption. http://stratechery.com/2013/clayton-christensen-got-wrong/ People aren’t metrics who look at processor GHz numbers but buy with their hearts (sorry, a bit mushy).

    Apple and their tech may be disrupted by many things but I doubt cost will be one of them. Android has been competing on cost at the low end for a long time now and Apple is still here.

  • pick

    “People aren’t metrics who look at processor GHz numbers but buy with their hearts.” Sorry but that is probably written from your point of view. If there is enough money available you can buy spontaneously and from the heart.

    On the other hand many people have to select carefully what they buy for the little money they have, and this is then far from buying from the heart. Getting the most for the money counts then.

  • niico100

    Describing the iPhone 5c as a ‘cut price iPhone’ shows a fundamental misunderstanding – it is barely any cheaper than the 5s.

    Furthermore, virtually no one was queueing for the 5c – early adopters were queueing for the 5s.

    So two mistakes in the first sentence.

    Apple’s business model is to make very high end, high margin products to a very high standard. There’s nothing stopping another company from making functional low end devices. Apple is a business – they can do what they like.

    Without Apple innovating at the high end, there would be nothing for everyone else to copy.

    To call this ‘more powerful than the latest iPad’ – is also incorrect. There is far more to power than clock speed. This core was used in the Apple A4 chip – not used since the iPad 1 in 2010!

    Fast clock speed = shorter battery life. This is far more complex than speeding up the clock speed. If you look at any benchmarks you will see it is far slower than a current iPad (and probably older ones).

    If you are going to write about technology I suggest you understand the subject first.

    I’ll be sure to link to PC World’s next article about architecture so you can compare notes.

    To compare Apple to Nokia and Blackberry really shows a breathtaking lack of understanding of the technology industry. Nokia and Blackberry failed – because of Apple. Apple won – and are still winning. Spend any time in east asia and note the number of fake apple logos everywhere – this will show you they are going nowhere.

    Apple spend $4bn on R&D last year, a 33% increase. They bought shares back because they have so much cash they don’t know what to do with it – because they are one of the most successful companies in the history of man! Clay Christensen is an idiot.

    They have the most profitable stores per square foot in the world.

    Very few Canadians will buy this tablet – nor will many others in the west. Why? Because it’s crap, the user experience is vastly inferior to the alternatives, and westerners can afford more. This is why the iPad and MacBook Air wiped out Netbooks (which cost far more than 37 dollars).

    Until this is on sale in the west the price point looks highly suspect also – more like $80 at least I would guess. (feel free to prove me wrong).

    Sure it’s better than a text book for the world’s poor, but it’s no competitor to the iPad or Samsung tablets.

    Nokia disrupted from the bottom with cell phones and cheap smart phones – look how well that worked (they are virtually bankrupt). Apple disrupted from the top – coming in at the very high end, with very high quality products. That is how you gain success, build huge margins & profits, and the most valuable, cool & aspirational brand in the world.

    Apple and Samsung have nothing to fear here.

  • Allan

    Before we get too carried away about the disruptive potential of these tablets, I should point out that the cheapest of these devices ($60) are wi-fi only with no cellular connection so one has the challenge of providing access to wi-fi in these communities.

    Then the devices that have both wi-fi and cellular (the cheapest is $80) are not 3G devices but 2G Edge devices, which are more costly for operators to run on their networks and slow to download content onto. The cheapest of these devices also run single core chips so are nowhere near as powerful as the current crop of brand name tablets. So yes, possibly appropriate for certain low-end segments in emerging markets but unlikely to prove very popular in developed markets.

  • ray

    Would have liked to read part two but the link returns you to part one!

    • Hi Ray,

      Thanks for pointing this out! It should be fixed now.