MUMBAI // The sleek, portable computing platform, akin to the iPad, offers all the practical features of a tablet computer - internet browser, multimedia player, PDF reader and video-conferencing capability.
But its biggest draw is its price: US$35 [Dh128].
Unveiling the prototype of the touch-screen computing tool in July, Kapil Sibal, who at the time was India's human resources and development minister, pegged the device as India's answer to the $100 laptop developed in 2005 by the Massachusetts Institute of Technology. The laptop, whose price rose later to $190, is used by the One Laptop Per Child Association, a US non-profit organisation, to create educational opportunities for the poorest children in developing countries.
Mr Sibal has similar ambitions for India, but at a fraction of that price. The $35 device will be introduced this year in thousands of higher-education institutions, offering an attractive, low-cost alternative for those who cannot afford laptops or personal computers. As research and development efforts continue, Mr Sibal expects the price of the device to drop to $10.
"The aim is to reach such devices to the students of colleges and universities, and to provide these institutions a host of choices of low-cost access devices around $35 or less in near future," Mr Sibal said at the launch. "In 2011, the sun will rise for the children of India."
The gadget is the latest among a slew of frugal innovations that have flooded the Indian market in recent years, offering new, inexpensive options to India's 1.2 billion people, whose per capita income is $1,000.
In 2008, India's Tata Motors launched the Nano, an egg-shaped sedan, well-publicised as the world's cheapest car. With its attractive launch-price of $2,500, the modern-day "people's car", as the Nano came to be known, fulfilled the dream of millions of scooter-riding Indians to become car owners.
The following year, Tata launched the Swach water purifier, priced at 1,000 rupees [Dh82]. The low-cost device operates without electric power, assuring millions of India's poor access to clean drinking water and diminishing the scourge of water-borne diseases.
In 2009, General Electric's healthcare laboratory in Bangalore unveiled a handheld electrocardiogram for $800 - less than half the price of a bulky conventional electrocardiogram. The new gadget reduced the cost of an ECG test to as little as $1 per patient.
Analysts say these low-cost innovations are not inferior knockoffs of technologies available in developed markets. Legions of small and large Indian enterprises are now focused on creating high-performance technologies that can be afforded by hundreds of millions of people at the bottom of India's economic pyramid. This trend does not reflect the desire to develop cutting-edge innovation as much as the wish to tap a large and lucrative consumer market in India, analysts say.
As India's economy continues its swift expansion- GDP growth of almost 9 per cent is forecast for the year ending on March 31 - it is being transformed from low-income to lower middle-income. Its per capita income has nearly doubled since 1990, moving hundreds of millions of Indians, especially in the country's rural heartland, to the cusp of becoming first-time buyers of consumer goods.
"In a country with a huge population but low average income levels, low-priced products are essential to increase the size of the addressable market," says Rishikesha Krishnan, a professor of corporate strategy at the Indian Institute of Management in Bangalore. "In many product categories, the demand among consumers in higher income brackets is already saturated, leaving the innovation of low-cost and competitively priced products the only way to drive growth."
The consumer market across India's small towns and villages has more than doubled since 2004 to $425 billion, according to a research paper released in 2009 by the Confederation of Indian Industry and the management consultancy Technopak Advisers.
Unlike in India's 300 million-strong middle class, individual consumers in rural India have limited purchasing power, but because, taken together, they are a gargantuan market, many companies have recognised that they cannot be ignored.
India's villages and small towns, home to 742 million people, have witnessed a spurt in consumption in recent years despite residents' minimal earnings.
The market is pushing retail demand faster in rural areas than in urban areas, according to India's Associated Chambers of Commerce and Industry, accounting for more than 60 per cent of the national demand.
In the July-September quarter in 2009, private domestic consumption in India rose 9.3 per cent from a year earlier, according to government data. Private domestic consumption accounted for 60.6 per cent of GDP, the highest among major economies, up from 57 per cent in 2008.
Globally, consumer confidence fell three points in the third quarter of 2009 to 90, amid concerns about poor economic recovery, according to the Nielson's global consumer confidence index. But India topped the ranking with 129 points, a sign of its buoyant economy.
In 2009, the Indian retail market, the fifth largest in the world, was ranked the most attractive emerging market for investment in AT Kearney's eighth annual Global Retail Development Index, largely on account of strong demand in rural India.
This market segment makes up 25 per cent of Nokia's consumer base. In 2006, the Finnish handset giant, whose brand is the most popular in India, initiated a "social inclusion" policy to woo low-income consumers.
With 618 million mobile phone connections, India is the world's largest mobile market after China, according to Gartner, a global research firm. The number is expected to climb to 993 million by 2014, with mobile penetration in the rural market growing at nearly 20 per cent in the period.
To penetrate the market, Nokia partnered with SKI microfinance, India's largest microfinance lender, and other financial institutions. Rural consumers can now buy Nokia's mobile handsets for a weekly instalment of 100 rupees.
For many companies, steep and regular price cuts have led to levels of market penetration never before imagined.
In 2009, the home products division of the global consumer goods company Procter and Gamble launched Tide Naturals, a 30 per cent cheaper variant of its flagship detergent Tide. The launch, the company said, was part of "purpose-inspired growth strategy" to reach "more consumers" in the untapped rural market. Within days of its launch, the product captured 0.6 per cent of India's crowded $8bn detergent market.
The international investment group Legatum said last year that "optimism about opportunity in India is strong, most of all among lower-income individuals" and low-cost enterprises. In a survey of 2,400 Indian entrepreneurs, business managers and aspiring entrepreneurs, 49 per cent of respondents earning annual incomes of less than $6,500, and 52 per cent of those earning between $6,500 and $16,200 believed that India was an ideal destination for entrepreneurs to succeed. Only 28 per cent of those earning more than $26,000 reflected similar optimism.
The $35 tablet computer was launched amid much fanfare, but it remains unclear whether the price includes a small profit margin and if the authorised manufacturer will sustain the price amid rising costs.
Tata cited a steep increase in input prices for increasing the price of the Nano by 4 per cent in July. Sales of the car dropped to 509 units in November, down 85 per cent from November 2009, despite a surging car market.
Tata has not disclosed the exact reasons for the sales decline, but analysts say the price increase may have put off buyers. Mr Krishnan believes the company needs to introduce attractive finance schemes that could encourage first-time car buyers to purchase the Nano.