ANALYSIS: Third Player Arrives - MIPS Makes $99 Android 4.0 Tablets a Reality

HOW WE ESTIMATED THE BOM FOR THE $99 NOVO7?

In China many low-cost 7-inch tablets can be found in the $65 to $80 range using the VIA 8650 800MHz CPU. Thus it is clear that Chinese OEM/ODM can upgrade an existing design for less cost than the big name sellers can design a tablet from scratch.

Using the Apple iPhone 4S as a reference smaller mobile device, we find iSuppli estimates the BOM at $188.00. Take the iSupply estimated cost of $37.00 for the Apple iPhone 4S display and touch screen with 960-by-640 resolution at 326 pixels per inch (ppi). We conclude the Ainol NOVO7 display is significantly less expensive than the 4S because their display is only 800-by-600 resolution at133ppi. Possibly a display and touch screen cost as low as $17.75, or less than one-fifth of the NOVO7 selling price in China.

Clearly, we always get the quality and feature set we pay for. However, at nearly one-quarter the cost of the Galaxy Tab and less than one-half the cost of the Kindle Fire, the consumer market just might purchase a lot of them.

According to the latest Gartner forecast, worldwide tablet sales will reach 63.6 million units in 2011 – a 261.4% increase from its 17.6 million sales in 2010. With this strong growth rate, tablet sales are expected to reach 326.3 million units by the end of 2015. Garner projects that through 2015 the iPad will sell over 50% of the tablet marketplace.

The Electronista web site reported that:

"Merrill Lynch analyst Scott Craig in a research note estimated that 2012 would see multiple tablet designers cut out of the market. RIM would be the primary victim, as its poor BlackBerry PlayBook sales had not only lacked momentum but created a ripple effect where developers didn't write apps. In his projection, the analyst saw the PlayBook as non-existent in 2012's market share.

Craig went on to pinpoint Acer and ASUS as likely to flame out, as they were squeezed at the high end by the iPad and below by the Amazon Kindle Fire. AMD would also be on the bad end as it's dependent primarily on low-end notebooks, "the area most likely to be hit by tablets.

The winners would be familiar from late 2011. Apple would still have the majority, even into 2013."

Obviously Ainol NOVO7 is going to need a lot of help from Android developers, along with input from Ingenic and MIPS on hardware updates.

The form factor has a lot of potential in the POS (point of sale) marketplace. Carrying a 7-inch tablet weighing 335 grams versus a 10-inch tablet weighing a hefty 613 grams is a big deal by the end of an eight hour work day. With properly designed applications the limitations of lower screen resolution display would be less of a distraction. Another option is to switch over to the Pixel Qi "3Qi" 7-inch screen display and you have great outdoor screen reading. Add in a docking device that recharges the NOVO7 battery and we could see a lot of them in nearby stores, job sites, and restaurants.

BSN* will have a hands-on review of the NOVO7 in the near future. So stay tuned for what we find with the real deal.