China (over) Produces $45 Tablets - Commodity Deflation!!

Looks like a job for Light Bulb Repair-Man
Last weekend I wrote about Apple founder Steve Wozniak's take on the "Samsung vs. Apple" patent battle.  Yesterday we looked at the billionaire Asian Titans, Lees, Lins, Lis and Gous, who took reuse and spun good enough gray market and refurb items into the dominant modern industry of our times.

Are display devices becoming like light bulbs?

Today, I ran across an article by Jay Goldberg in VentureBeat about his latest trip to Shenzshen, China.

Android tablets are selling in Shenzhen at $45 each, brand new.

"Hardware is dead".
This was a 7-inch tablet, Wi-Fi only with all the attributes of a good tablet. Capacitive touchscreen. Snappy processor. Front facing camera. 4GB of internal memory and an expandable memory slot.
I later found out that these devices are now all over the supply chain in Shenzhen. At volume, say 20,000 units, you can get them for $35 apiece. My device ran full Android 4.0 Ice Cream Sandwich and had access to the full Google API, including Gmail, Maps, YouTube and Google Play (not quite sure how that works either).
Once my heart started beating again, the first thing I thought was, “I thought the screen alone would cost more than $45.” My next thought was, “This is really bad news for anyone who makes computing hardware.”
The title is misleading. The hardware isn't dead.  In the industry, it's called "commoditization", where yesterday's unique must-have hardware becomes mass produced, and competition renders it the price of an ear of corn.  Apples may truly become apples.   Even as Apple and Samsung fight over the patent on the tablet and touch phone, the fact that the critical component - the small touch screen - was not owned / invented by either, has taken over reality.

This is not a small deflation.

Yes, it is still aggravating that OEMs seem to manufacture devices NOT to be upgradeable or repairable.  But if they are producing them at 10 percent the cost of a year ago, that may undermine the tinkerer blessing.

Eventually, we want technology to become cheap, like the light bulb. If Chinese labor brings it there faster, the commodity becomes more affordable. Hopefully, the production is environmentally sustainable. I'm happier owning a 45 dollar product which my pals in Africa can afford to chat back with me on, than I am with a $850 device which I play solitaire on.

 But this might not be something Fixers can survive.  Perhaps this is not something fair trade reuse can survive.  We can re-harvest components.  But I have chilly feeling that the opportunities for reuse and refurb might go the way of the light bulb.

The first light bulbs lasted forever and might even be repaired, as the Chinese used to repair even imploded cathode ray tubes.  They used to actually recut, re-phosphor, and re-mold the tubes, the reuse of the glass was actually worth that.  That was given up on as the price of used ones fell, and soon they gave up on polishing them a few years later.

Now the CRT tube is like a light bulb.  If the vacuum is gone, if the tube is blown, it's waste.  No one on earth is recutting the tubes anymore.  But at least it took a decade.

Demand for the LCDs we used to sell from the dismantled computer monitors collapsed last spring;  prices for used working and repairable LCD screens are falling fast.

My friends in Africa and South America already have the choice of buying used TVs from China.  At $45 per tablet, they will soon be selling new computer devices like plastic shoes.

If the devices become small, light, and reuseable enough, the need to mine raw materials for them may actually dampen as well.  If the software doesn't bloat them into obsolescence, we may all find ourselves with all that we need, the consumption fever may abate.


zoobab said...

Apple is now the richest company on the planet, thanks to branding and nice design, overcharging people 10 times to price of the hardware, and spamming competitors with stupid patents.

The real price of the iPad is around 150USD, not more.

Icetiger said...

actually microsoft is the richest IT company on the planet, out selling apple by far, apple is barely in the top 20