It's all speculation for now. But with the cost of handheld technology decreasing, the $35 tablet may actually arrive.

The Indian government is attempting to generate interest in the development and production of a $35 cloud computing tablet. What is the potential impact for a $35 tablet?

This $35 tablet would affect the existing computer, pad, tablet and e-book vendors, cloud computing, cell phone/smart phone vendors and wireless service traffic and charges. It could change third world countries’ access to their citizens, early education availability, higher education for the over 25,000 colleges and universities in India, product and service marketing and advertisements. Computing and the cloud could reach a huge population that cannot afford it today.

The prototype tablet would support functions like word processing, Web browsing, and video-conferencing. Indian government officials are looking for partners to bring the cost down to about $10. The impact of this effort at $35 is substantial. At $10 per tablet, the impact would change the game for vendors of computer and existing pads and tablets and have a profound effect on the access and use of wireless services.

Now, it is possible this will never happen. Previously India wanted to offer a $20 laptop, and that did not materialize. But let’s assume that the $35 tablet eventually comes to the market.

The vendors of hand held devices would be challenged to either meet the price or offer more features on a slightly more costly platform, possibly for $50. There is nothing on the market today that could compete with the Indian tablet. It would be very likely that Indian manufacturers would produce the device thereby keeping the cost low.

Cloud services would have to become much cheaper. The customer should be able to acquire the services on a menu basis. Each item would cost pennies to use, thereby attracting many users. Bundled services that cost as much as the $35 tablet per month would not sell to the low income audience.

A different cloud service business model would have to be developed. Since it is initially focused on India, you can expect a number of Indian companies will start offering the cloud services from local sites.

The wireless access would be relatively easy to implement at colleges, universities, libraries and primary schools through on-campus WiFi. Once you move out of these concentrated communities, the wireless access will be problem. The wireless carriers could set a number of WiFi access locations rather than offering full cellular service. The population of users would greatly expand as well as the traffic. The number of simultaneous users would pose problems for the carriers. The carriers might opt for lower speed access for the tablet users to ensure coverage for a large population of users.

How the tablet would be powered is another problem for low income customers. If electricity is not available to recharge a battery, then there may be local charging stations created and funded by advertisers or though local retail outlets. Another possibility is that the tablet could have solar cells for acquiring power. This would probably raise the tablet price but reduce the TCO for the tablet owner. If regular batteries are used, they would have to be long lasting and really cheap for the low income user.