DataWind plans to sell 6 million low-cost tablets in India this year

Unexpected demand is however putting pressure on its infrastructure, including support

DataWind is targeting sales of about 6 million units of its low-cost tablet in India this year, but it has to arrange additional manufacturing capacity and strengthen its support network to meet what looks like an unexpected surge in demand, an executive of the company said.

The Aakash tablet costs about US$50 and was launched in October under an Indian government program to offer low-cost tablets to students. DataWind, a start-up with operations in Canada and the U.K., bagged an order from the Indian government for 100,000 tablets up to March 31, and has delivered 10,000 so far.

A new order from the government for low-cost tablets is expected this month, and DataWind plans to bid, DataWind CEO Suneet Singh Tuli said Thursday. The company has meanwhile launched a new version of its tablet priced at $60.

DataWind's business model and the low price of its tablet depends on large volume sales, Tuli said. But DataWind may no longer be entirely dependent on government business.

The company is seeing a surge of interest from consumers, businesses, and nongovernmental organizations for its tablet, which it started marketing directly under the name Ubislate7.

The demand was evident when the company offered 30,000 units of the first version of tablet for sale on its website last year: they were sold in two days. The company has as yet to deliver some of those orders, Tuli said.

Pre-bookings since December for the new version of the tablet, called the Ubislate7+, have now crossed 2 million, Tuli said. Customers do not have to pay to book the device, but DataWind plans to convert their interest into firm orders. Direct business could this year account for sales of between 5 million and 6 million units, Tuli said.

As the company prepares to deal with increased demand, there have however been complaints about the poor performance of the device, delayed deliveries, and a toll free support line that cannot be accessed.

Tuli said DataWind is hiring more staff and tying with an outsourcer to run the customer support center, which is currently overwhelmed with "tens of thousands of calls" each day. "We are asking for people's patience while we build up our capacity," he said.

Users are curious about the device, but their interest may not in all cases be converted into business for DataWind, said Vishal Tripathi, principal research analyst at Gartner. The device is not strong on performance, which could have been expected from a low-cost tablet that costs less than a mobile phone, he said.

The Aakash may do for email and simple browsing, but it is slow, and is in no way comparable to more expensive tablets, Tripathi said. It may find a market among consumers who want the thrill of having a tablet but don't want to pay a lot for it, he added. Small companies and NGOs may buy the tablet for very specific applications, he added.

The tablet announced in October had a 7-inch display with 800-by-480 pixel resolution, 256MB of RAM, 2GB flash storage, and a 366MHz processor. It had the Android 2.2 operating system running on it, and offered Wi-Fi capability.

For $10 more, DataWind has started offering Ubislate7+ with a 700 MHz processor. The tablet runs Android 2.3, has support for GPRS (general packet radio service), and offers longer battery life than its predecessor.

Besides offering pre-bookings for the new version on its website, DataWind has also offered the device to the government. "Subsequent to the launch in October, we got a tremendous response from the chip makers with very aggressive pricing," Tuli said.

DataWind is busy blocking manufacturing capacity with contract manufacturers in India. It plans to get the tablet manufactured in at least four locations by the end of the first quarter, rather than the one it had originally planned, Tuli said.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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