Zoo Station

Long-time readers of this blog know of my association with the RISC/Deeshaa project. Working with us actively was Rajesh Jain, who many of you know via Emergic. In the past few years, I've been waiting to see Rajesh's various ideas to come to fruition, and none more so than his dream of a sub-$100 PC. From my own research on mobile phones, I know that the price point was crucial to widespread adoption. I figured the price point would have to be around the same as that of a B/W TV set in India ($100 approx). Of course, bringing down hardware costs in isolation doesn't do a damn thing if there isn't relevant content, or something inherently useful for consumers. The third part, as Andrew always reminds me, is the user interface. Some of the success of the mobile phone can be attributed to its ease of use, partly because it's a single-use device (especially at the bottom-end of the market).

Rajesh tackled the hardware problem by setting up Novatium, along with Ray Stata and Ashok Jhunjhunwalla. Though they've had plenty of glitches to deal with, they've just announced the arrival of the first prototypes of the $100 NovaNetPC. The machine is a thin client, and is designed to be used even with a TV as monitor. I presume the machine is primarily targeted at SME's. For instance, stores which want to do better inventory management could use the Novatium thin client.

This blog may well be the first place you've heard about Novatium, but you will certainly hear a great deal more about the company in the coming days and months. CNet's Michael Kanellos was the first to write about Novatium. Rediff carried a story a couple of days back. But, the best story I've read thus far has been Om Malik's piece in Business 2.0 (subs required).

The $100 PC has long been considered the hurdle to clear in order to reach technology's biggest pot of gold -- affordable computing for the masses in countries like Brazil, China, India, and Russia. Make no mistake, this isn't just altruism. A cheap PC is a great business opportunity for anyone who can build a 10 percent profit margin into each device, as Jain's company is trying to do. That's why chipmaking goliath Intel (INTC) is working on cheaper processors targeted overseas, why Microsoft (MSFT) has begun selling a $20 stripped-down version of its Windows operating system, why giants like Advanced Micro Devices (AMD) and Google (GOOG) have partnered with maverick MIT professor Nicholas Negroponte to develop a $100 laptop.

So what gives tiny Novatium an edge over such high-profile competition? Most of those companies have focused on making traditional desktop PCs or laptops cheaper by using older, slower chips and skimping on memory and hard-drive storage. Novatium, on the other hand, has created a state-of-the-art network computer that mimics a traditional desktop machine at a fraction of the cost -- and that will soon be made to run on any television, anywhere.

The first thing to go was the hard drive; in its place, engineers suggested, a simple USB port would suffice. Users could store data over the network or on ever cheaper USB memory sticks and external hard drives. Engineers also found that a $10 16MB flash memory chip could replace far more expensive RAM. Finding a microprocessor, the engine of any computer, wasn't nearly as simple. If limited to just a handful of tasks and a tiny operating system -- well suited for Novatium's planned device -- a DSP, Stata knew, would work as well as anything made by Intel. The chips also ran on just 5 watts of power, compared with 25 for a Celeron. Not only would that make it possible to keep a Novatium device running on backup batteries -- a common requirement in outage-plagued Indian homes -- but it also meant doing away with the expensive cooling fan. Best of all, though, was the cost: about $10.

As Om mentions in the story, being a thin client, it is crucial that NovaPC tie up with a pan-Indian broadband provider. Beyond that, they have to come up with content/software services that will add to the productivity (lowering transactions costs, income generation etc) of the consumer, since I don't really see the $100 segment using a PC for entertainment. It may also be possible to bundle a suite of services, including VoIP-based telephony, and offering it on a per-month basis. Finally, the GUI is extremely important and Novatium needs to figure out a way to make usage at least as easy as using a mobile phone.

For the time being though, I think we should all wish Novatium and Rajesh the very best. If this works, it could well mark a paradigm shift in the PC market, and also open the doors for many more products aimed at the untapped portions of emerging markets.