How Disruptive Could Raspberry Pi Be?

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 havent 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 wont 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.