Marching Towards the $25 Computer?

It's a given in the high-tech world — prices fall. They might fall slower or faster depending on the device, the components, and the product segment, but they generally drop as the devices move into the “commodity” category.

As industry watchers, we all know this trend, and any number of companies forecast this trend every year. Still, though, it's always a bit surprising to read about a low-cost computer selling for $25 in Europe.

Raspberry Pi Model A — a credit card-sized device that's selling for $10 cheaper than the previous Mobel B — is getting a bit of a buzz in the tech-geek space, and The New York Times is calling it one of the “the hottest and cheapest little computers in the world right now.”

The new Raspberry Pi circuit board is a stripped-down version of the previous model, and comes with 256MB of RAM and one USB port. The idea behind it is to replace expensive computers used in classrooms or schools, and make it easy for hobbyists or teachers to plug in peripherals and test concepts. According to a statement from Premier Farnell, one of distributors selling the product:

The launch of Raspberry Pi last year was seen as a huge opportunity to fill the gap left by the demise of computer programming courses in education, and the increase in ready to use PCs, laptops and tablets. As such, demand for the Model A board is anticipated to be from those making industrial control modules, from roboticists, automation, and significantly, to use the Pi as a very cheap media centre.

Interestingly, one of the devices was sent to the upper atmosphere, 40,000 meters high, to collect weather info, videos, and photos, the NYT reported.

Downside of cheap
Yes, for computing geeks, this is a nifty thing and will give kids a cheap way to learn about a PC's inner workings. But I can't help but think there are other longer-term implications of having stripped-down computers being sold for $25, particularly as it affects convergence of other devices.

Already we see people using tablets and smartphones as on-the-go replacements for laptops, and while laptops are still more efficient workhorses, the overall PC market has been taking some punches. As Gartner's forecasting shows, device spending worldwide will be up this year compared to 2012, rising 6.3 percent year-on-year to $666 billion.

However, that estimate is significantly lower than the $706 billion the firm previously predicted. The drop “reflects a sharp reduction in the forecast growth in spending on PCs and tablets that is only partially offset by marginal increases in forecast growth in spending on mobile phones and printers,” according to Gartner.

More specifically, as Richard Gordon, managing vice president at Gartner, notes:

The tablet market has seen greater price competition from android devices as well as smaller, low-priced devices in emerging markets. It is ultimately this shift toward relatively lower-priced tablets that lowers our average selling prices forecast for 2012 through 2016, which in turn is responsible for slowing device spending growth in general, and PC and tablet spending growth in particular.

Not that $25 computers used by kids and hobbyists will do much to shift that worldwide IT spending trend, but it could open the doors to many people globally who still have limited access to computing devices.

21 comments on “Marching Towards the $25 Computer?

  1. Cryptoman
    February 12, 2013

    I think technology has become cheap and mature enough to give more options to users. Yesterday users were bound to a laptop for all their computing needs whereas today a user can have a tablet to carry around for web browsing, emailing and messaging on the go while keeping a high power and bulky laptop for work. In addition, a smart phone will do more than just keeping you talking these days and can easily take over most of the tasks of the tablet when its battery is about to go flat when you are out and about. The trend I see in the computing world is more and more affordable platforms are becoming available to allow users to dedicate almost one device per task. In other words, the users are starting to keep a separate horse depending on the race track of their interest.

  2. ITempire
    February 12, 2013

    @ Rich

    There are limitations as well if the computer size is shrinked down. Many computer users dont prefer smartphones and tablets because of smaller screen size and to-date slower processors. So if 25$ computer is following the trend of smartphones, then it will usual have the same limitations as that of smartphones.  

  3. ITempire
    February 12, 2013

    Well said, Cryptoman. One uses smartphones for internet usage (or stuff other than phone call) while walking or where he cannot turn on the tablet. One uses tablets where he is settled down on a chair but the location isn't office so tablet is preferable to laptop. One uses laptop for advance applications and when in laptop. Where does this 25$ computer fit in ? Or is it simply an alternative for users for a smartphone.

  4. Cryptoman
    February 13, 2013

    Raspberry Pi fits into the picture from a different application perspective.

    Raspberry Pi looks like an embedded development platform rather than a PC. You need to buy a separate keyboard and TV to connect to it besides other peripherals. The user also needs to box it up to be able to use it like a computer without having to worry about spilling coffee over it while working! Pi also does not come with an operating system. So the user needs to have a degree of relatively “low level” hardware and software skills to get it up and running.

    In my view, this puts Raspberry Pi to the embedded computing league for hobbyists and students. Raspberry Pi is interesting because it managed to squeeze into a niche application area in such a competitive market and managed to turn quite a few heads so far.


  5. elctrnx_lyf
    February 13, 2013

    Yeh this may not be a real computer as you said. It may be only that can work some hobbyists to do some tests and experments.

  6. Wale Bakare
    February 13, 2013

    >>Raspberry Pi looks like an embedded development platform rather than a PC<<

    That's exactly it! I have been very critical about it, no OS and other peripherals. How can you buy that and present it as a gift to someone with absolutely zero knowledge of software or hardware? But the fact that, it uses linux OS differentiating it with other embedded devices, and its architecture is similar to that of PC.

  7. Brian Fuller
    February 13, 2013

    I have in my hot little hands a second-generation Akash tablet targeted for the Indian market. It's a nifty piece of engineering and the price point for that market is around $35 (and falling). 

    On the occasional dark, lonely night, I see this as a death spiral for the industry. But semiconductor designers are not just about leveraging Moore's Law. They're about relentlessly driving more value into their VHDL and Verilog. 

    In the shorterm, we'll continue to integrate to maintain value while trying, on the back end, to manage design costs to keep the overhead down. 

    (That I think about on sunny, coffee-fueled mornings). 


  8. t.alex
    February 14, 2013

    Reaching $25 price point with a display and some input like touch interface is a bit hard right now. Perhaps wait a while till the display becomes cheaper.

  9. Adeniji Kayode
    February 15, 2013

    I agree with you on that, Manufacturers are making so much efforts to make sure that consumers can not do without using their product in a day.

    That to some extent may be a sign of good success.

  10. Wale Bakare
    February 15, 2013

    A popular adage from my place says” if you dont help them carrying it, one day it would get dumped at your backyard”. I think, two factors are driving innovations (1) Consumerization (2) Internet-of -things.

  11. kilamna
    February 15, 2013

    This is to 'computers' what Heathkit was to radio etc. At $25 hobbyists and 'inventors' will have a lower cost way of trying out their ideas.  It is not a PC in the sense of a laptop, or perhaps even a cheap tablet.

    The incessant price reduction does indeed put pressure on the higher end applications, but we still see $90 'laptops' in the same advertisement with $1500 laptops.


    BTW the Akash (the $35 item in Brains 'hot little hands') is just that: the throwaway price of the item. It cannot possibly factor in service, support, replacement etc. One has to be very carefull not to fall into these PR 'traps'. Most readers will have heard of microfinance doing magic; few ill have heard that the 'interest' rate is in the vicinity of 50% per year (it is not called interest in certain countries due to the religion-based prohibition on interest). This high rate is 'required' in order to pay the staff needed for disbursement of funds and collection of payments (both are done personally, face-face). This personal contact is a necessary element of the program > societal and community pressure to pay, on time.

    (Brian: is it that your hands are 'hot', or the raspberry board)

    (Sorry for the digression off topic, but it is important to understand what drives the NGOs to do what they claim they do: Very often to perpetuate their own 'jobs' of management and staff)

  12. Brian Fuller
    February 15, 2013

    AzmatMalik, good (and funny) points! Yes, my hands were a little bit warm. And yes, it's clearly no iPad Mini in form or function, but as a device for a regional demographic, it's hard to argue with. 

    But to me, there's always a larger force at work in such situations. In this case, we're porting a western invention built with expensive components and incorporating nice margins into an economy with a different price point by costing-out the invention. The disruption, though, like will be not a cheap tablet that's affordable by Indians but by another invention that starts with meeting that country's needs. 


  13. Adeniji Kayode
    February 16, 2013

    Good to know where your adage came from.

    Howdo you mean “help them in carrying in this particular issue.?

  14. ITempire
    February 17, 2013

    @ Cryptoman

    You need to buy a separate keyboard and TV to connect to it besides other peripherals

    Ok so now I understand why the price tag is so low. It will be interesting to see how users react to it. 

  15. Cryptoman
    February 17, 2013


    The configuration Raspberry Pi offers is very typical of an embedded hardware development platform. Most vandors sell similar type of platforms as 'evaluation boards/kits' and 'development kits'. Look here to see exactly what you get as a Raspberry Pi. This link actually has pictures of a clever lego based housing designed for Raspberry Pi. Even with this clever lego box, it's still a long was off from becoming a useable PC.

  16. Mr. Roques
    February 17, 2013

    Seems like an interesting device that could help with very specific tasks, similar to an Arduino board.

  17. ITempire
    February 18, 2013

    @ Cryptoman

    To be honest, this device (way it appears in your link) has no concept built in called packaging. Only a hardware engineer or a geek might find this device attractive. 

  18. Cryptoman
    February 18, 2013

    @Mr. Roques

    It's good to see other fellow Arduino users 🙂 You are absolutely right. Arduino and Rapberry Pi are in a similar league in terms of application domain in the broadests sense. Raspberry Pi has much more horsepower than an Arduino platform obviously.

  19. Jennifer Baljko
    February 18, 2013

    Cryptoman is right, some extent. Raspberry Pi folks are filling a gap for hobbyists and students, and yes you have to connect it to other peripherals. But even if you see it as embedded device or a super low-end computing platform, I think the idea here is two-fold: one is there is a niche for these types of devices, and two, that this long-awaited convergence between PC, tablet and phone is happening and will impact pricing and longer-term branding strategies. At the end of the day, the main questions are how many devices do people really need, and how many devices are they willing to buy?

  20. Jennifer Baljko
    February 18, 2013

    As Brian points out and some others of you noted, you're not likely going to wrap up the Raspberry Pi and give it as a birthday gift ( well, unless you have a tech-geek friend or 14-year-old  who loves tinkering with this stuff). The point is how much value is being derived — and could be derived in future iterations – and how are hw engineers rethinking their designs to match the value prop.

    February 19, 2013

    I wonder how popular the Pis are among young people.  I reckon most sales will be from older geeks like myself.  However I do hope there is significant uptake amonst younger people and that they are inspired to go on to do great things in future.

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