The New York Times has a story today on a $40 Android-powered tablet called “Ubislate 7Ci” made by London-based Datawind. The 7-inch tablet is aimed at students in India initially, and it packs an 800-by-480-pixel touchscreen, Android 4.0.3, a 1GHz Cortex A8 processor, and 512MB of RAM, USB port, headphone jack, mic, front-facing camera, and Wi-Fi. The company sold 2.5 million of the tablets so far, and it is about to provide a 100,000 unit to the government for India’s schools:

Mr. Singh says his cost of assembly for a Ubislate is about $37, and he sells it to the Indian government for $40. He keeps the price low by using Google’s free Android operating system and cheap semiconductors found in low-end cellphones. In addition, he says, his company figured out how to make its own touch panel to fit behind the liquid crystal display screen. The LCD is still manufactured by an outside company.

The tablet’s performance looks to be half-decent for the price tag from the video demo below. That is if you can get past its ad-supported apps. However, with recent rumors of a $99 Nexus tablet, we can only imagine what kind of an impact a $50 Nexus 7 could have. According to Gartner, it might be just a year or two before that is a reality.

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“The biggest problem we have with this device is that none of the decision makers, the reviewers, or the trend setters are our customer,” said Suneet Singh Tuli, the Canadian-born chief executive of Datawind. “Personal computers caught on in the U.S. when the price got to about 25 percent of the average person’s monthly income. In India, where people make $200 a month, that is about $50.”

You can read more on the $40 Ubislate on The New York Times.

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