At MWC yesterday, several emerging market operators, led by keynoter Sunil Mittal of Bharti Airtel, cited a lack of affordable smartphones as the key obstacle to growing data services and – not coincidentally – ARPU. (GSMA covers the talks here.)

Mittal called for GSMA to mount a program aimed at producing a $50 smartphone in a year.

As goals go, this is less dramatic than President Kennedy’s 1961 challenge to put a man on the moon before the end of the decade. SA’s Wireless Smartphone Strategies service projects that just under 5% of global smartphones will ship this year with a wholesale ASP under $100, so much of the heavy lifting of meeting the $50 price point has already been done. (See “Global Smartphone Sales Forecast by Price-Tier: 2003 to 2016”.)

Still, it’s ambitious. But even more ambitious would be to offer a $50 smartphone that people in developing countries would actually want to buy and use. I hate to keep beating up on the $38 Aakash tablet – actually, that’s not true: I love beating up on it – but the lesson there is that meeting a price point without providing value for money is a bad idea.

Our recent interviews with potential tablet buyers in developing countries and before that with first-time phone users clearly demonstrated that low and middle income customers are willing to accept some compromises to meet their budgets, but not every compromise. A one megapixel cameraphone might be acceptable, but don’t try to foist off some old VGA sensors just to keep the BOM down. (See “Tablet Prospects in Developing Countries: The Voice of the Consumer” and “Voices of the Next Billion: Mobile Adoption at the "Bottom of the Pyramid")

For SA’s blogging from Barcelona, click here. 

There are many versions of what is going on with India’s much-heralded Aakash educational tablet, announced last fall with a price tag of $38 before taxes and support.

• In one, which seems to have begun in a story in India Today a couple of weeks ago, the Aakash is a dismal failure, subject of so many user complaints that the sponsoring Ministry of Human Resource Development is contemplating refusing to pay DataWind, the Canadian manufacturer.
• Not so, says Sunit Singh Tuli, CEO of DataWind in a story in “India RealTime”, a blog of the Indian Wall Street Journal. The project is on track, an improved version is in the works, and the customer is perfectly happy.
• No so fast, shouts somewhat hysterical “True Indian,” posting an anonymous comment to the India RealTime story: “Suneet Singh Tuli is a known fraud & a liar! Check his track record and the state of his companies. The tablet – Aakash – does not work as has been known in various reports by independent agencies yet he says the tablet is approved by International agencies – WHICH ONE APPROVED IT?” [Disclaimer: Strategy Analytics is merely quoting this posting; we do not endorse its characterization of Mr. Tuli.]
• To further roil the already murky waters, a story in Light Reading India last week says that IIT (Rajasthan), which was apparently involved in the procurement process, asked DataWind to implement  changes and improvements that would – according to DataWind – bring the cost up to something like $2,000. The story also claims that DataWind is discussing a deal with Reliance Industries to produce a sub-$100 commercial version of the Aakash.

This may be one of those things that an outsider has no hope of sorting out, but that may not even be the point. The key issue that the Aakash concept raises is whether there is some floor level of functionality that must be achieved for a device to be useful, even in rural Indian schools.

I personally believe there is, and if the Indian government wants my advice – which so far they have been limping along without – they’d be better off spending $38 x 100,000 on hiring more teachers, and wait until there are affordable tablets with great battery life, Wi-Fi and WLAN connectivity, and good screens.  (For my initial take on the Aakash, see “Aakash $38 Tablet is Not the Game Changer in Emerging Markets - But the Game will Change”.)