After $35 tablet computer, pacemakers may be next

DAVOS, Switzerland Wed Jan 25, 2012 2:21pm EST

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DAVOS, Switzerland (Reuters) - A huge banner in Davos trumpets India's launch of a $35 tablet computer and U.S. group Medtronic Inc is hoping to launch a similar low-cost revolution in medical devices like pacemakers.

Chief Executive Omar Ishrak plans is using this week's annual World Economic Forum (WEF) to brainstorm on how to bring cost-effective implantable devices to patients in Asia, Latin America and Africa.

The world's biggest medical devices company has an ambitious goal to develop new and cost-effective products such as pacemakers for the poor, while simultaneously selling its existing ones to the growing middle classes in emerging markets.

"One has to be realistic about affordability in the under-served segment," he said in an interview, adding that the new generation of simpler devices should be five to 10 times cheaper than current high-specification products.

"To accelerate healthcare access one has to think about disruptive methods -- disruptive technology and disruptive delivery mechanisms," he said.

While the work is still at an early stage, Ishrak has already identified heart pacemakers as the most likely area for initial research and development.

"I'd like to challenge all our businesses to start thinking this way but the area where we are furthest ahead is perhaps pacemakers, where we're thinking of real disruption in terms of cost and simplicity," he said.

Ishrak, who was recruited from General Electric Co's healthcare unit last May, has made emerging markets his immediate focus. He aims to lift their contribution to group sales from 10 percent to 20 percent over the next few years.

Makers of diagnostic equipment and scanners, like Siemens and GE, are also pursuing so-called "frugal innovation" for developing countries. But the challenge is greater for devices that are implanted into the body, where clinical trials are needed.

If everything goes well, Ishrak hopes to see results in three to five years.

Tapping into the promise of emerging markets is a key theme for the 2,600 participants at the WEF, even as India's eye-poppingly cheap tablet computer shows how the competitive landscape is changing.

The world's cheapest tablet computer -- called Aakash, or "sky" in Hindi -- is being sold to students at the subsidized price of $35 and later in shops for about $60. It was developed by DataWind, a small London-based company, with the Indian Institute of Technology.

India already has a reputation for creating affordable products in other areas from Tata Motors' $2,000 Nano car to generic versions of Western medicines.

(Reporting by Ben Hirschler; editing by Patrick Graham; For full Reuters coverage from Davos go to www.reuters.com/davos)

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