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Raspberry Pi and the advent of the $100 tablet

Apple's new iBooks 2 app is demonstrated for the media on an iPad at an event in the Guggenheim Museum January 19, 2012 in New York City.
Apple's new iBooks 2 app is demonstrated for the media on an iPad at an event in the Guggenheim Museum January 19, 2012 in New York City.
Mario Tama/Getty Images

Over at Fred Wilson's AVC blog, he writes about the gangbusters success of the Raspberry Pi, a very rudimentary Linux-based $35 computer that has no display or keyboard but can be plugged into a TV. And he comes to two striking conclusions, in as few words as possible:

When the cost of tablet displays comes down, which they will, I think we'll see sub $100 tablets. And I suspect that will happen in the next 3-5 years.

For markets that can be end to end digital, like education, this is a game changer.

Let's tackle his first point: a sub-$100 tablet. This is a disaster for Apple (keep an eye out for my post later today about how Apple can and can't get to $1,000 a share). Cupertino needs to defend its pricing model at all costs. As I've written before, price is the most important thing for Apple — not innovation or design. In fact, I'd argue that pricing, specifically pricing for a 30-percent profit margin, is Apple biggest innovation. At least of the Steve Jobs Second Act Apple.

If you have a bunch of cheap commodity tablets, then the game becomes one of software rather than hardware. Apple does seem to be thinking in this direction, however modestly through its acqusition of Chomp — more an effort to make the ever-growing App Store more searchable. But this still isn't really Apple software, it's software that's enabled by Apple's platform. 

In any case, I like what Fred is thinking here. His firm, Union Square Ventures, is funding a bunch of disruptive software companies that will play well in a cheap-tablet mobile environment.

As for the "end to end" digital thing, as it applies to education...well, I don't know what he means. There seems to be this idea out there that tablets are going to revolutionize learning. And again, Apple is in on the action, with iBooks 2. But where did we get this idea that education needs to be tied to textbooks, printed or delivered by tablet? Khan Academy has shaken up that idea quote thoroughly. Perhaps Fred is thinking about this when he says education can be end-to-end digital. But a cheap tablet for every student in every classroom isn't going to be a game-changer, in my view. 

That said, a sub-$100 tablet in many classrooms would be a problem for Apple, assuming the company wants to control the distribution platform so it can charge a premium price in a market that has always been receptive to its products.

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