Margin is the difference between the cost of acquiring the product and the price for selling it. Ingenic Semiconductor sells 7 inch tablets for $85 FOB (factory gate) which cost them only $35 for materials. Add a few dollars for assembly and packaging and they get perhaps $40 margin for each unit, a huge percentage of the selling price. They can do that because they use a MIPS processor and Android/Linux 4 so they don’t have to pay taxes to anyone for the technology. At a retail price of $120 shippers and retailers also can make money. Everyone makes money on the transaction except Wintel because no one needs them to produce pretty good technology.
On the other hand, Wintel is trying to sell “ultra”books at close to $1000 and OEMs are thinking they will sell a bunch at a few percent margin with Wintel raking in huge profits. What’s the consumer going to choose, something that can give the whole family and the in-laws a decent computing experience for a similar price or something that works for only one person and sits idling most of the time? Oh yes. There is a market for these low-end gadgets everywhere on the planet. They are not that “low” and end when it comes to performance. They definitely provide acceptable performance for many purposes with all the advantages of portability.
For prices like this an ordinary person gets all the IT they need in a great package:
FLOSS works for IT everywhere. It provides great computing at a great price and everyone wins. I recommend Debian GNU/Linux for IT. It’s a cooperative product of the world and works for you and not some corporation with a monopoly. By spreading the margin out along the supply chain everyone benefits, even the end user.
see Digitimes – China CPU designer offers low-price Android 4.0 tablet PCs