Exit the Nano, pursued by the Nano-killers

Interesting to see the emergence of parallels in perceptions of the low-cost car market and the low-cost computer market. From Wired's article about the sub-$3,000 Tata: 

Now that Tata Motors has shown the way, competitors are scrambling to offer their own budget vehicles. Hyundai has announced a $3,700 car. Renault-Nissan has teamed with Indian motorcycle maker Bajaj to put 400,000 of its own ultra-low-cost cars on the road by 2011. General Motors is rumored to be working on a Nano-killer with China's Wuling Automotive. 

Time was (and still is) when the OLPC initiative was seen as launching a wave of innovation around netbooks, which led to the Classmate, the ASUS eeepc (which was initially based on the Classmate reference design) and an explosion of competitors. As far as I can tell, however, the manufacturers who have jumped successfully into this market aren't pursuing strategies at all like OLPCs; they aren't even focusing with any real diligence on education sales. 

I'm generally skeptical of models in which first movers are seen as suddenly alerting competitors or copycats to potential markets that had been neglected because, well, no one been able to realize a combination of design and price that would appeal to it. My skepticism increases when it's a market that opens less as a result of conceptual innovation (e.g. Twitter, YouTube) than of re-engineering and re-combining pre-existing tools. Yes, I do realize that the XO is a  swell feat of collaborative design specifically targeting (at least at first) children in developing countries. But the marketplace is demonstrating that manufacturers don't need one-off interfaces, learner-centric apps, or mesh networking to have sales. And HP (via e-inclusion) and other companies were tracking developing-country and emerging-market trends well before the OLPC initiative; Intel had already launched their 

In the case of Tata and the Nano, efforts by competitors are at least partly defensive: Manufacturers don't want to risk losing all of a global market that might reach 10 million per year by 2019 (my back-of-the-envelope estimate). However, Nano-killers will only generate nano-profits, and productive capacity won't be sensibly diverted from higher-margin models. Remember, Buick is the largest-selling brand in China. (Although the situation is slightly different in the cheap-device market, the trend toward higher-cost/higher-markup products demonstrates the sway that profit margins hold over marketing and production.)  My sense is that other manufacturers will direct some of their considerable resources into low-cost designs and, eventually, manufacturing, but that this was a space that they'd been tracking for quite some time and they simply aren't about to let Tata get too far along without having at least to face up to competition, in its South Asian backyard and, perhaps, elsewhere.