Will only cheap products succeed in Indian markets?

In most of our interactions involving marketing products for India, one hears the generalized view that "In India, unless the product is cheap it will not succeed".

From my experience in marketing technology devices, the price of any tech device depends on the cost incurred by the customer due to the problem the device is trying to solve, and also the other alternatives available in the market. That the tech device is able to solve the problem is of utmost importance, and not the price.

The best example is the Akash tablet. At 2500-3500 rupees you have a really clumsy device which does not solve anyone's problems. Instead, at 6500- 9000 rupees you have various tablets, including the micromax funbook, which address the customer's need to have a handy device with which to browse the internet. One would rather pay a little more and have something which works, rather than save a little and end up with something which is useless.

Innovation need not be focused on making 'cheap' products, rather the innovation could be in a business model where a moderately priced product is made affordable in a pay per use or some other revenue model. My belief is that in the same way rural India warmed up to the sachet SKUs for urbane products like shampoos, Indian customers may pay premium on smaller affordable units that work.

More on the Indian tablet PC market

Continuing from my previous post on the Indian Tablet Market. Two major events occurred which are related to tablet PC industry- Kapil Sibal unveiled Datawind's 'Akash' tablet at sub 2500 rupees, and within a day Steve Jobs, the man who gave a fresh life to tablets, passed away.

Many professionals today mistake Steve as the innovator of tablets - that is not true. Just like iPod was not the first mp3 player, iPad arrived a few years after tablets were first released. All the earlier devices failed miserably, and full credit to Steve to have had the guts to venture into this area, as well as make it a roaring success.

I think even other good tablet makers like samsung owe it to Steve for having revived the market and indirectly enabling their sales too.

Meanwhile I have bought my first tablet- an android 2.3 based iBall Slide - a value for money device with decent features at 14k rupees. The one reason I chose this over slightly lower priced competitors like Reliance Tab, Beetel Magiq, Mercury mTab, etc was the presence of USB Host - the ability to connect USB keyboard, mouse, pendrives, etc - which were otherwise found only in the 30k device range. Hopefully this device will meet all the needs till the products become more mature. The only one irritant in using it is that some websites still work with only Internet Explorer - which is not possible with android or iOS devices, and that's the only area where netbooks score.

Apart from Samsung Galaxy Tab, I think another device worth checking out is Asus Eee Pad, which at 29k priced bundled with keyboard dock and android honeycomb OS is hi end at much lower price than iPad.

Going at this rate, I think over a period of next 3-5 years, computing will move over to tablets entirely.