Aakash: India's low cost Tablet

NEW DELHI: A dream project of the government, the 'world's cheapest tablet PC', Aakash, is being produced at less than USD 35 (approximately Rs 1,750) per unit, but the replacement warranty attached to it has led to an increase in its price by about USD 14 to USD 49.98 per piece. 

"The government has asked for a special replacement warranty. Government has asked us not to to repair it (Aakash Tablet)... You will have to replace it... which is a big cost," Suneet Singh Tuli, the CEO of Datawind, the company manufacturing the tablet, told PTI. 

Tuli further explained that the ratio of defects in any device sold in India is higher when compared to America because of the harsh climatic conditions here.

"Those kind of costs add to it. This (Aakash) is Rs 2,200... it can be Rs 1,700. Actual manufacturing cost still is less than Rs 1,750. But there are all these other conditions which take it above Rs 1,750," he said. 

On July 22, 2010, HRD Minister Kapil Sibal had unveiled a prototype of the device and announced that it would be developed for use at around USD 35 per unit. 

To ensure complete transparency and a level playing-field, the National Mission on Education throughInformation and Communication Technology ( NME-ICT) decided to task IIT Rajasthan, Jodhpur, with the job of procuring and testing these devices, based on the design and specifications that the mission's team had finalised. 

IIT Jodhpur had floated tenders and the lowest bidder quoted an ex-factory price of USD 37.98, which was close to the cost mentioned by the minister. 

This cost comprised components and material, as well as manufacturing expenses. The final landed price of USD 49.98 (Rs 2,276) per unit included taxes, levies, and charges like freight and insurance, servicing and documentation, etc. 

Tuli said people have been challenging the development of such a low cost device, but by selling this device to the government, Datawind is making enough profits, which even allows him to donate 10 per cent of the total profit to charity. 

Tuli said that over-and-above the production cost, Datawind pays almost 20 per cent as taxes, which add to the cost of the device. 

"If we bring it after making in China, then there would have been no issues, because it's exempted from duties. I would have not been required to pay 4 per cent VAT (value added tax). Getting it from China and selling in India would have not make it exciting. Therefore, we made it at Hyderabad," Tuli said. 

He said that company will sell the commercial version of Aakash in the market for Rs 2,999, which - unlike the government's Aakash tablet with a 1-year replacement warranty - will carry only a 30-day replacement warranty. 

Tuli has said that he will sell the government Aakash tablets for Rs 1,750 if the government orders 10 lakh units. At present, Datawind has an order for supplying 1 lakh units to the government. 

The government is buying the tablets for Rs 2,276 per unit and giving them to education institutes at a 50 per cent subsidy.

DataWind has been able to get to a price of $38 for the tablet which has a 7-inch display with 800-by-480 pixel resolution, 256MB of RAM, 2GB flash storage, and a 366MHz processor from Connexant. The tablet runs the Android 2.2 operating system.

Local sales taxes, performance guarantees, and an exacting replacement warranty have taken the price to the government up to $50, said Suneet Singh Tuli, CEO of DataWind in an interview.

The target is to get to $35 per unit, inclusive of warranty, once volumes pick up.

The Indian government is expected to buy 8 million to 10 million units of the device by March 31, 2012, the end of the Indian fiscal year, Tuli said. The first order of 100,000 units will be executed from a factory in Hyderabad over the next six weeks, he added.

Tuli said that Sibal's vision and the commitment of business from the government had driven the company to accept the challenge to come up with a device at about $35.

The Aakash tablet has been designed, developed and manufactured by DataWind, in partnership with an educational institution, IIT Rajasthan, DataWind said in a statement.

The design of the product was done by DataWind between its centers in Montreal and India, Tuli said. IIT Rajasthan is coordinating the project, including firming up the specifications, and doing the field testing.

DataWind plans to market the product in a number of emerging markets, and also commercially in India in November where the price will be about $60 with added GPRS (general packet radio service) capability, which will allow it to double as a phone. Higher-end versions of the product will also be launched in less price-sensitive markets like the U.K. and the U.S.

India's low-cost computer had a number of false starts and experimentation with the government at one point talking about a $10 laptop. Officials in the Department of Higher Education, however, clarified that the device would not be a laptop.

In July last year, the country's Ministry of Human Resource Development announced a $35 computing and access device for students of colleges and universities. The price of the device, which was to be designed by Indian academic research and education institutions, was eventually dropped to $10, according to a statement from the ministry.

India did not sign up for the One Laptop Per Child program after officials in the education ministry decided that giving a computer to every child is "pedagogically suspect" and may actually be detrimental to the growth of the creative and analytical abilities of the child.

The configuration of the DataWind tablet is adequate for most applications including HD quality video, reading books, and basic office applications, according to Tuli. The company makes up for the lower speed of the processor by using compression acceleration technologies that shift a part of the processing during Web browsing from the device to the cloud, Tuli said.

DataWind was able to achieve a low price for the device by its vertical integration model which includes designing its boards, integrating some components in-house, developing the middleware, and making the touch panels, he added.