The PC market is an extremely competitive one, and when it comes to entry-level computers, margins are thin and manufacturers fight for both media exposure and consumer dollars.
Apple (NSADAQ:AAPL) may get lavish attention from news outlets worldwide for its latest laptops, and electronics stores will be happy to sell you a new Ultrabook from Samsung (PINK:SSNLF) or Toshiba (PINK:TOSBF), but when was the last time you heard anyone get excited about a dirt-cheap computer? You can buy a desktop PC from Dell (NASDAQ:DELL) for under $300, but people hardly rave about a machine of this caliber.
So why all the noise about the Raspberry Pi? In case you haven’t heard, the Raspberry Pi is a computer that brings the concept of compact and cheap to ridiculous levels. Measuring 3.3 by 2 inches, and only one-sixth of an inch thick, this minimalist PC is intended to make basic-level computing affordable for the masses, although even the stripped down version is equipped with a variety of video outputs, including HDMI for connection to a high-definition TV. The upgraded “B” model also includes Ethernet, and both versions can take portability to extremes by optionally running off of four AA batteries. While neither of these mini PCs is capable of running feature rich operating systems like the latest versions of Windows, they do fine with Linux. The kicker is the price: $25 for the base “A” model and $35 for the “B” with ethernet networking and 256MB of RAM.
The first question that many people ask is: Are these for real, or is this one of those deals where a cheap computer concept ends up being unfeasible when real-world production costs are factored in? The answer is that they are very much for real. The beta units have already sold on eBay (NASDAQ:EBAY) auctions and the shipping versions are currently in production. The company plans to launch worldwide in a matter of weeks. What those who invest in technology companies should be wondering is just how disruptive these micro PCs might be.
Although Raspberry Pi is produced by a UK-based charitable foundation (the Raspberry Pi Foundation) with the stated goal of making PCs available to school age children worldwide, the arrival of fully featured computing device of this size and at this price point has the potential to shake up many industries – well beyond anything envisioned when the One Laptop per Child project launched several years ago.
For example, the most recent demonstration video posted by the foundation showed one of the PCs being used to stream video from an iPad to a TV. An Apple TV streaming box will do the same thing, mind you, but that Apple TV retails for $99, does nothing else besides stream video and is estimated to cost Apple $64 to manufacture. And where the Apple TV is limited to 720p-resolution playback, the pocket-sized computer is capable of outputting Blu-Ray quality video. A Raspberry Pi has also been demoed running Quake III, a decidedly dated video game, but one that still sells in a version for the Xbox 360, a videogame console that retails for $200. The foundation reports it has already received inquiries from hospitals, museums, parents of disabled children, robotic enthusiasts, and representatives from developing countries. A micro PC like the Raspberry Pi could conceivably be used in a wide range of applications if it were licensed. Among them:
- Ultra-cheap tablet PCs
- Onboard automotive systems
- TV sets (advanced functions such as built-in video gaming or web browsing)
- Smart appliances
- Home or industrial automation
Even if it simply sticks to providing affordable, capable PCs to developing markets, Raspberry Pi has the potential to put a serious crimp on the plans of manufacturers who saw the potential to sell cheap machines there themselves. There may be billions of people who lack their own PC, but you can bet they won’t care if a computer is capable of running the latest Microsoft (NASDAQ:MSFT) operating system or playing the latest and greatest video game — not if they can pick one up for $25.