$10 Laptop Turns Out Be a Joke

If the $2,000 Nano from Tata Motors raised the hackles of European and U.S. carmakers, the latest plans from India to build a laptop computer costing just $10 should have the likes of Apple and Dell weeping. On Wednesday, the Indian higher education ministry said that a government-funded consortium of semiconductor manufacturers and science and technology institutes, including the Indian Institute of Science in Bangalore, and the Vellore Institute of Technology, was just months away from rolling out the "Sakshat" laptop. Though first selling for around $20.00, the price would halve in a matter of months, once production ramped up. The Sakshat, plans for which were unveiled in the southern Indian city of Tirupati, will have a two-gigabyte memory. Analysts are cautious about the project's potential for success. "The costs of the basic components you have to buy add up to more than $100.00," noted Gartner analyst Leslie Fiering. Closing the "digital gap" in India has been a central plank of the government's plan to boost the education and skill levels of the country's 1.1 billion people. However, the proximity of the latest announcement to a general election scheduled for May has not escaped the notice of skeptics in India. If successful, the laptop would vastly undercut the cheapest laptops currently available. The Massachusetts Institute of Technology has been selling its planned $100.00 XO-1 at $199.00 , while Taiwanese computer maker Asus's Eee PC netbooks--no-frills laptops that effectively act as Web portals rather than storage devices--retail for a price in the region of $300.00. So, can India wing it? One possibility, said Fiering, is that the $10/$20 headline price represents the subsidized price of a more expensive computer that comes via a contract with a telecom network, similar to a strategy employed by companies in Japan. If successful, the device would add to the pressures on the mini-laptop industry, which is already feeling the heat generated by the arrival of netbooks, she argued.