Students in India can now buy a fully-functional 7″ tablet, the Aakash 2, for about $20 after a government subsidy, or about $45 retail. These are prices that could bring computing to hundreds of millions in the developing world, and their effects in rich countries could also be profound. But if you live outside the developing world, don’t run down to your local electronics retailer just yet; you simply can’t get this much functionality at this price.
The reasons are myriad, but they boil down to this: These tablets are already so cheap that your distance from the supply chains that build them can add 100% to their final cost. In this way, they’re like many other goods.
Suneet Tuli, CEO of Datawind, maker of the Aakash 2 tablet, recently explained to me all the costs that are added to a commodity 7″ tablet from China when someone attempts to import it to India. (Much of this applies to attempts to import the same tablet into any other country.) Here’s how a $45 tablet purchased wholesale in Shenzhen, China winds up costing at least $100 in India: