Firms rush to make low-cost tablets

This article has been corrected. Please read the clarification at the end of the article.

Apple’s iconic iPad2 and Samsung’s Galaxy Tab are set to face a local challenge.

A bevy of Indian companies are set to launch tablets at price points between Rs 10,000 and Rs 20,000 – half to one-fourth of what the Apple product costs.

Companies such as Spice Telecom, Bharti Teletech, Karbonn and Lava Mobiles are hoping to repeat their success in the mobile phone market. Indian companies have wrested one-third of this 150-million-units-per-annum market from big boys like Nokia and Sony Ericcson.

BK Modi’s Spice Mobile is planning to launch a model for Rs 15,000. New Delhi-based Lava Mobiles is looking to launch a seven-inch tablet for Rs 17,000-18,000. It has set up a team to develop India-specific applications.

“We are planning to launch by September. Our USP is that it will work on the Android platform. It will be localised for India. So, we are developing applications on infotainment and online news,” says S N Rai, co-founder and director of Lava Mobiles.

Karbonn Mobiles is preparing to launch an internet media tablet with features such as ambient lighting and proximity sensors. “We will sell through disruptive marketing in terms of product offerings at various price points that will be backed by localised application content,” says Shashin Desare, executive director, Karbonn Mobiles.

Lending a helping hand is US technology provider Qualcomm, which is offering cheaper chipsets and software application support. It is even co-launching products.

Says Qualcomm CEO Kanwalinder Singh: “We are working with vendors for tablets whose prices will range from Rs 10,000 to Rs 20,000. There is a lot of demand for our lower-end chipsets. We are also co-launching some products with Indian manufacturers to give them a push.”

For instance, Qualcomm Ventures has invested in mapmyindia.com, a navigation software, and in Apalya, a TV application company. These applications are being offered to Indian manufacturers.

The new entrant in the mobile space, Bharti company Bharti Teletech (Beetel brand), also plans to join the race. CEO Vinod Sawhney says they will target smaller cities which are not the focus of companies such as Apple. “Our main strategy is to come out with products with Indian features at affordable prices,” he says. The company is planning to sell in over 125 towns.

One reason for this rush is the growth potential -- 0.7-1 million tablets are expected to be sold in India this year. With increasing affordability and growth of 3G services, iPads could replace net PCs.

But there are challenges also. One is Samsung and Apple using their financial muscle to drop prices.

Rai said the ideal price would be below Rs 10,000. But this barrier has not been broken yet. Also, volumes are key if prices are to fall. But they are yet to pick up.

Rai says the price of the panel, which accounts for 60 per cent of the cost, could fall more than 20 per cent if his company buys more. “That’s the biggest challenge” he says.

CLARIFICATION
This article had erroneously mentioned that Qualcomm Ventures was invested in mapsofindia.com which is incorrect. Qualcomm is invested in mapmyindia.com. The article has been corrected. The error is regretted.