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Low-cost Aakash Targets All Who Can't Afford Computers: Suneet Singh Tuli, Datawind CEO

Datawind Ltd, widely known as the maker of world's cheapest Tablet Aakash (Ubislate 7), is riding high on its initial success. The Tablet device, launched with the aim of bridging the digital divide in India, has got a 'massive' response, to say the least. The company, which was expecting to sell around 100,000 units a year, is now looking at a steep demand curve – rising to more than 4 lakh units a month.

But Datawind has also drawn flak for delayed deliveries and poor customer support (it seems that the toll free number cannot be accessed most of the times). And to top it all, the system is not as fast as other Tablets in the market (the basic version is powered by 366 MHz processor which is very less), has low memory (256 MB RAM) and low battery life (2100 mAh, 180 minutes). The criticism may be justified to a large extent, but the company has geared up to resolve these issues. Datawind claims that the upgraded version (Ubislate 7+) will feature a more powerful processor, an advanced OS and a better battery life.

In a candid interview with Techcircle.in, Suneet Singh Tuli, CEO and co-founder of Datawind, discusses the concept behind the low-cost device and its benefits, as well as the company's plans to grow and expand to more mature Tablet markets like the USA and the UK. Tuli also explains that the device has been launched to ensure better Web access and a satisfactory multimedia experience (in spite of the fact that the Tablet connects to Internet via GPRS or WiFi, instead of standard 3G). Here are the excerpts.

What was the concept behind creating a low-cost Tablet like Aakash?

We believe there is a huge digital divide in this space because of the cost factor. In India, there are 900 million mobile phone users but only 48 million people are connected to the Internet. That's a huge disparity and it's primarily because of the cost. We believe that Aakash can deliver computing and Internet devices within the price range of a mobile phone. The technology and the hardware can help empower the masses, especially by spreading education.

Did you ever think that Aakash would get such huge response?

It was unimaginable. Industry analysts told us Tablet sales in India would be around 250,000 units in 2012. But we disagreed with that because our product is not a traditional Tablet. It's a low-cost computing device for people and it could very well be someone's first computer. So the market could be more like one million units and we hoped to capture 10 per cent of that – around 100,000 units. But now it seems that we can exceed that estimate and sell 5-6 million units this year.

What was the target audience you had in mind before launching Aakash?

The target audience is anyone who can't afford a computer and that range is extremely wide. Think of a call centre worker in a tier B or tier C city. If his average salary is Rs 10,000, he can't afford a computer and broadband access. But a device costing Rs 3,000 makes a lot of sense for that customer. Or think of a rickshawallah. He also wants to save money and educate his kids. So he is our prospective customer if he believes that these products will help improve the quality of education. We will be lucky to be a part of this phenomenon.

How can you keep the Tablet price at sub-$50?

We created a technology for which we obtained 18 US patents and a variety of international patents which helped shift the burden of memory capacity and processing power from the client device to backend servers. So it costs us less while we are able to deliver a rich user experience. Plus, we have 20-23 years of experience in manufacturing a whole range of consumer electronic products. As a result, we are more vertically integrated and more specialised in designing low-cost gadgets than the average manufacture.

In just over a week, you got orders for 1 million units or more. Is Datawind geared up to deliver the promise?

Well, today we have more than 2 million pre-bookings and unfortunately, we are not geared up for that. Datawind has a manufacturing tie-up in Hyderabad and we are coming up with a second tie-up there. The third one will be in Kochi and the fourth will be in Noida. With multiple manufacturing relationships becoming operational, we hope to build enough capacity to address the market demand.

So, what's your business model?

We create low-cost hardware. In fact, the hardware is a customer acquisition tool and we make money from several things – hardware, network access, content and services. But the whole ecosystem is crucial to us and not just the device.

Will you be able to project yourself as a standalone platform like Apple's iPad?

I strongly believe we can. Aakash and its updated version (Ubislate 7+) will have strong market position because people won't find any other computing device at this price point.

Aakash is powered by a 366 MHz processor and comes with 256 MB of RAM that will make it exceedingly slow. Will the speed issue turn users off?

It depends on the user. The commercial version of the product, Ubislate 7+, features a Cortex A8-700 MHz processor and that will considerably speed up the Tablet. The RAM should not pose any problem either.

The device is intended for three key functions – wireless Web access, multimedia consumption and routine computing like using word processing/spreads sheets, android apps and of course, playing games. Yes, it will be slower than the iPad when you are playing games. But the cost is almost 15 times lower and the price difference matters. If the price tag doesn't bother you, go for an iPad – it's a better brand and more prestigious. But if pricing and good Web access are priorities, Ubislate is the one for you.

There have been complaints about delayed deliveries and poor customer support. Are you working on these issues?

When you are expecting to move 100,000 units a year and suddenly have to cope with 2 million end-users, you are bound to disappoint a few. Although we are trying to ramp it up, we couldn't satisfy everyone. Prior to the launch, only two people were taking care of the toll free support and we had only 10 calls a day. But now, we get 12,000 calls per day and that's massive. We are trying to outsource the job though, to ensure better customer support.

People using the new Tablet are not too impressed. Do you think it's another Nano in the making – preferred because of its low cost?

I think most users will be happy with the product. But if you have been using an iPad for the last six months, chances are you won't like it. As for Nano, there are other options even at that price point. One can spend 20 per cent more and buy a used car. Or you have the option to get a bike at one-third of the cost. But you won't find a Tablet at this price. Even a smartphone with a 3 inch or 4 inch display will cost you double the money.

How much business are you getting from the Indian government?

The tender we won was only for 1 lakh units, but it was a big deal at that time. The next tender will be out within the next couple of months and it will be for a million or two million units. We will definitely bid for it.

What are your plans for expanding operations outside India?

Right now, we are trying to meet the market demand here. But we are in talks with several governments and have close operational ties in quite a few countries. So we expect to launch Aakash in a number of international markets within the next six months

What do you think of China as a potential market?

Datawind already has an office in China and we manufacture some of our products there. We haven't sold any of our products there yet but we will certainly consider that in future.

Aakash has probably met with so much of success in India because it is a price-conscious market. What about launching it in more mature Tablet markets?

We expect to launch our Tablet in the UK and the USA this year. But the features will be a little different from the existing ones. Those will have EVDO modems on the CDMA network and that will increase the product price to some extent.

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