Anything Too Good to be True…

…usually is.

I got a link to this very interesting story, Hardware is Dead, at the site VentureBeat. Excerpt:

In the US, when we talk about tablets we usually mean the iPad and increasingly the Kindle devices, but beyond that there is not much else in the market. I had heard that tablets in China had already reached low price points. You can buy a reasonable Android phone for $100 retail, and I wanted to see if I could find a $150 tablet. This consultant pointed me to a mall filled with hundreds of stalls selling nothing but tablets. I walked into the middle of the scrum to a random stall. I pointed to one of the devices on display and asked, “How much for this one?” 300 kuai. My Mandarin is a bit rusty, so I had to ask again. Slowly, the stall owner repeated renminbi 300 yuan.

If this were a movie, the lights would have dimmed and all the activity in the room frozen. 300 renminbi is US $45. And that was the initial offer price given to a bewildered foreigner in China, no haggling. I felt a literal shock.

I bought the device and did some more research. This was a 7-inch tablet, Wi-Fi only with all the attributes of a good tablet. Capacitive touchscreen. Snappy processor. Front facing camera. 4GB of internal memory and an expandable memory slot.

I later found out that these devices are now all over the supply chain in Shenzhen. At volume, say 20,000 units, you can get them for $35 apiece. My device ran full Android 4.0 Ice Cream Sandwich and had access to the full Google API, including Gmail, Maps, YouTube and Google Play (not quite sure how that works either).

A $45 tablet computer.

The thrust of the article is that this is a game-changer. That at that price point, everyone will buy a tablet computer. I think the author is probably right about that. But here’s what I found interesting:

My contacts in the supply chain tell me they expect these devices to ship 20 million to 40 million units this year. Most of these designs are powered by a processor from a company that is not known outside China — All Winner. As a result, we have heard the tablets referred to as “A-Pads.”

When I show this tablet to people in the industry, they have universally shared my shock. And then they always ask “Who made it?” My stock answer is “Who cares?” But the truth of it is that I do not know. There was no brand on the box or on the device. I have combed some of the internal documentation and cannot find an answer. This is how far the Shenzhen electronics complex has evolved. The hardware maker literally does not matter. Contract manufacturers can download a reference design from the chip maker and build to suit customer orders.

Now China is the land from which rumors have been spreading about counterfeit microchips with embedded spyware.

If you wanted to do a real cyberjob on the American economy, imagine what a few months of spying on millions of people doing online purchases and online banking with their “A-Pads” would net you. Bank accounts and routing numbers, credit card numbers and security codes, or just introduce a Stuxnet-like virus into our financial system and let it run wild.

After all, nobody knows who’s building these things, right?  Doesn’t matter!

“All Winner.”  Well, the Chinese have a saying:  “Business is war.”

I know I’m paranoid, but sometimes I wonder if I’m paranoid enough.

Oh, sorry forgot to add this before I hit “Publish”:

I thought discovering the A-Pad was pretty exciting. So I was dismayed to find that the week after I got back from China, a device that looks a lot like my A-Pad was on sale at Fry’s Electronics for $79. No brand listed. The process has already begun.

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