Byway Star

[This post was published on Pluggd.In on October 11, 2011]

Why the world’s cheapest tablet isnt necessarily a great idea.

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So Aakash, the $35 tablet is out. As some rejoice with patriotic-joy(and some with the thrill of having found a bargain), here’re some questions.

How is it possible to sell a tablet at a price that’s around 5% of an iPad’s price? Is the cost of making a tablet *that* low? Have we been fleeced by gadget-makers all along? It turns out this is possible because the Government is procuring this tablet from a Canadian company Datawind at $50 a piece.

Akash : Cheapest Tablet? Who Pays the

Price?

Now, apart from selling Aakash to GoI at $50, Datawind is also selling the tablet commercially at $60 – so Datawind appears to have possibly decent margins.

But hold on there. Datawind is making a profit – but the Government is buying the tablet at $50 and selling it at $35. The Government is losing money. What’s going on here? Who pays for the balance of $15? Where does the Government get the money to cover up this $15 of subsidy? Over hundreds of thousands of pieces, this amounts to millions of dollars – where is this huge amount coming from?

The answer: from taxes. From the money you and I pay every month as income tax. From the money my maid or my neighbourhood vegetable vendor pay as tax every time they buy toothpaste, rice or soap.

Now, I can see why the Government thinks that you, as a relatively high-income person, need to pay for someone else’s $35 dollar tablet(though I don’t really see why you should finance someone you don’t even know, but that’s a different matter).

[Read: Indian MPs Officially Sanctioned iPads, But Why?]

But to have my newspaper boy or an auto driver pay out of his meager income to finance a $35 dollar tablet for students? Sounds like Robin-Hood in reverse?

What do you think? Do you think Government sponsored low-cost devices and gadgets are necessarily good for the society?