Over the weekend I went to my local tech store to check out some low-end Android tablets. Most of these come from no-name brands and have basic processors, non-HD screens, and small amounts of memory. While most can run rudimentary Android apps, they are too underpowered to use many of the really cool processor-intensive ones. However, you can listen to music, watch video, and surf the web on them, so clearly they are functional. They happen to be of great interest to users in emerging markets, and surprisingly we expect many will be sold in the US and UK this Christmas, too.
Research shows that in China alone, millions of low-cost Android tablets are being sold each month and are primarily being used as portable video and music players, but not much more. They do some web browsing but connections are spotty in most areas, so in many ways these devices have to be used primarily in local mode. Even though these devices run Android, Google doesn't receive any serious revenue from them since most are loaded with localised software and tied to local services.
Interestingly, these low-end tablets may be the first entry point into personal computing for millions of users in Asia, Africa, and South America for whom cost is a real issue. It is with these devices that they will cut their teeth on the concept of personal computing. Cheap tablets will become the training wheels that introduce them to the broader world of computing.
Now it's true that feature phones and smartphones might actually be their first pseudo-personal computing device, but handsets are limited when it comes to delivering an actual computing experience. That is why cheap Android tablets are of such interest in these emerging markets; they represent a step up in the digital experience.
If this is true, what type of device would these folks upgrade to in the future? The answer is critical for the PC industry because it could unlock serious opportunities for mainstream PC vendors, as well as dedicated tablet and smartphone manufacturers. Some think it could drive them to more powerful tablets since mobility is also important in these markets. That is a good possibility since cost will still be an issue. And while the tablets they buy today cost $99 (£60) and less, it is possible to create more powerful tablets at perhaps only a $50 (£30) premium. They might not have HD screens at that price, but there's a good chance they could have a more powerful processor and more memory. If entertainment is still the primary purpose for the digital device, a tablet with more power that can run more apps may be all that's needed.
But there is another thing to consider when targeting these markets. Many tablets are used for education and in a lot of cases they can also be used for commerce or even to help run family businesses. There are thousands of examples from China, India, and South America. That suggests the next step up for these users might be something like a cheap hybrid or 2-in-1 device that bridges the gap between a tablet and a laptop.
A third alternative exists and mainstream PC vendors are hoping if it is the case, they can play a role in these markets in a bigger way. Even in the United States and Europe you can buy Chromebooks for around $200-250 or £200-250. In China you can get a cheap Windows laptop, too. But in China and a few other markets where people have not had access to laptops, people's early use of tablets has really whetted their appetite for a richer computing experience. In many instances they are eyeing more powerful tablets and even considering cheap laptops.
Although the PC vendors hope these emerging market users will eventually move to laptops, I suspect tablets with more processing power will likely be the next step up for those who can afford it. I wouldn't count out cheap laptops either, as they are capable of delivering a better all-round computing experience, especially when used for education.
Those of us who live in developed markets forget that owning a PC places you in the minority when you consider the whole world's population. That means there are more than four billion potential users of these marvels of technology. I doubt Steve Jobs saw smartphones and tablets as important entry points to bring computing to the masses, but it seems to me they are already working as the training wheels that will drive billions more towards embracing personal computing.