Aakash (sky) is the limit for the company that makes world’s cheapest smartphones

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Suneet Tuli, CEO, Datawind, maker of the world's cheapest tablet/phablet says by seeking out alternate sources of revenue from content, ads and apps, his company is able to sell the devices for less than $40 (CAN).

Suneet Tuli, CEO, Datawind, maker of the world’s cheapest tablet/phablet says by seeking out alternate sources of revenue from content, ads and apps, his company is able to sell the devices for less than $40 (CAN).

This is the second and final part of the two-blog series

When the Tuli family settled in Fort McMurray, Alberta, in the late ‘70s, they were the only Sikh family in town.

Being gawked upon was not uncommon, as was name-calling. However, the four Tuli kids excelled in school and in many ways were gifted. Mother Parveen Kaur, a poet and artist worked at the family’s construction firm and when she was not handling the books there, she immersed herself in her artistic pursuits.

Sikhism was not just a religion for the Tulis. It was a blueprint for life.

In Grade 12, Suneet Singh Tuli, CEO of Datawind, ruffled more than few feathers when he a filed human rights complaint against his school for suspending him because he carried the ceremonial dagger (kirpan) to school.

“In Sikh religion when you get baptized, you’re told Guru Gobind Singh is your father. My mother, grandmother and other elders in the family always emphasized that belief in us,” he said. “Our faith was strong. So, we grew up with a sense that we were special and that created a different mindset.”
He won.

The 10 per cent factor

A few years ago, Raja and Suneet Tuli decided to wade into the turbulent Indian cellphone/tablet market despite knowing fully well the country’s cumbersome bureaucracy and corruption could result in headaches and heartaches. Yet, they went ahead because they wanted to bridge the digital divide in the developing world where an overwhelming number of people live in poverty and have no access to technology.

Remember Suneet’s penchant for gimmicks? That was sort of responsible for Datawind chasing the Indian government to contract it with an order to deliver 100,000 units of Aakash 2 (a low-cost tablet).

The Datawind CEO wanted to set another record, this time for the world’s cheapest tablet. So, the company competed in the bidding. Turns out, Datawind’s bid was 20 per cent cheaper than their closest competitor.

Aakash 2 is cheapest tablet in the world. Even in China, a haven for low-cost components, a similar device sells for $40 and up at least. The android device, unlike its predecessor Aakash 1 has a competent processor and adequate RAM.

Initially, the company ran into trouble as it was unable to fill the order before deadline, but that was only a small setback and it pushed on.

On a quarterly basis, Datawind sells around 900,000 tablets and enjoys 15 to 18 per cent of the total market share for tablets/phablet in India. In the 5,000-rupees segment (low end price bracket), they are the indisputable monarchs as they boast a 55 per cent of the market share.

How on the earth?

Can somebody manufacture a low-cost product and still remain sustainable (financially)?
First off, Datawind makes its own touch screens. The firm set up a thin-film fab in Montreal and in the late 90s Raja decided to make touch panels there. In 2010, the Chinese delivered touch panels for a seven-inch device for approx. $20/piece (CAN), but Datawind was able make the same at their Montreal plant for a fraction of that cost.
Suneet explains the company’s business model focuses on selling its hardware at cost and finding revenue from apps, contents and ads.

Then, there’s Raja’s ingenuity. His technology shifts the burden of processing devices from client servers to back-in servers. So, despite a five per cent margin, Datawind’s low-cost products are not only helping the company’s bottom line, but are also meeting its original premise of making these devices affordable to the masses.

School girls in the state of Rajastan step into the digital age via Datawind's Ubislate tablet, touted to be the cheapest device in the world retailing at under $40 (CAN).

School girls in the state of Rajastan step into the digital age via Datawind’s Ubislate tablet, touted to be the cheapest device in the world retailing at under $40 (CAN).

“It’s not that people can’t make low-cost devices,” Suneet said. “The fact is nobody wants to compete in the entry-level market. I call it the forgotten billions. There are a billion people whose monthly income is less than $200/month. We want technology to be accessible to them. I strongly believe the Internet is the most powerful thing. It will not only educate people, but also empower them.”

One of the tenets of Sikhism urges people to donate 10 per cent of their earnings in acts of charity. Datawind adopted an orphanage in Punjab and donated a bunch of computers to them, but the machines weren’t put to great use, but over the years, Suneet became interested in combining technology and education.

“To me, all this is a very important validation to create awareness that we can survive on low-cost devices and to evangelize the benefit of having affordable devices and technology and the impact it has on education,” Suneet told TDD. “This (cheapest tablet/phablet) was my gimmick, the equivalent of the Guiness World Record we attempted years earlier.”

 

 

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