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

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.”



If fax machines could talk: The Datawind story

Raja and Suneet1

Raja (L) and Suneet Singh Tuli are brothers with a Midas touch. Their Canadian company, Datawind, has bridged the digital gap with its affordable devices. Supplied photo.

Some people equate their net worth with their self-worth.

Suneet Singh Tuli doesn’t need constant validation from the tech-industry to acknowledge the impressive feats his company Datawind has pulled off since it was founded.

The Tuli family’s spirit of enterprise grounded in deep-rooted spirituality powers not their devices, but the company’s strong corporate social responsibility (CSR) initiatives as well.

Datawind’s UbiSlate tablet—which retails at $37.99 — may not enjoy the same cult status the Apples and Samsungs do, but, it’s safe to say the devices are transforming the lives of the millions of people in developing countries by giving them access to technology.

Whenever an email from a remote school in Uganda or India with photographs of children holding a UbiSlate device lands on his inbox, Suneet, 46, says he feels a sense of fulfillment.

“When your business impacts something or someone, then it becomes fun,” Suneet said. “The real satisfaction comes when you can get people connected and excited about technology.

Suneet’s says although he’s the face of the company, his intensely private older brother, Raja, 48, is the one whose idea it was to come up with a low-cost tablet.

The Garage Story

So many tech startups in Silicon Valley and elsewhere can trace their origins to ubiquitous garages. These windowless spaces have served as an incubator to rock stars and tech mavericks alike.

For starters, the Datawind’s Garage Story did not start in the garage. It began in Yukon.

The Tulis immigrated from Iran in 1979 and put down roots in Fort McMurray, (Alberta). Lakhbeer Singh Tuli (Suneet and Raja’s father) started a construction company that primarily built bridges in remote areas of Canada. His sons, Raja and Suneet, spend their summers working for their dad.

One of the sites was in Pelly Crossing in Yukon.

One summer, the ever-perceptive Raja, noticed staff cutting strips of technical drawings, individually feeding them into the fax machine, and then gluing the pieces together.

Raja was convinced there had to be a better way. So, he hit upon the idea to build a large fax machine from scratch. He sourced the materials, designed and assembled it. This fax machine one could accommodate large format engineering drawings without mutilating them.

Raja, who was a fresh graduate, approached his dad to loan him the seed money to commercially market the “world’s largest fax machine.”

Tuli Sr. agreed to fund the enterprise. The fledgling company (Widecom) then hired experienced sales guys to market the product, but six months into the venture, sales went cold.

At this point, Suneet, a natural salesman, was pursuing his engineering degree at the University of Toronto. He suggested to Raja they contact the Guinness Book of World Records (GBWR) and submit the fax machine for consideration as the world’s largest fax machine. Raja was initially skeptical, but Suneet convinced him.

The fax machine made it into the silver book.

Then everything unfolded seamlessly. Fortune 500 magazine devoted a quarter-page to the Tuli brothers and their ingenuity. Some weeks later, British Petroleum (BP) placed an order for 12 machines, each costing $20,000 each.

“In 1992, there were no prominent desis (Indians) in either Wall Street or Bay Street,” Suneet said. “Worse, there was a backlash against turbaned people (with flowing beards) because of the Iranian Revolution. So, when the fax machine took off, we represented a “Made in Canada” success story, a story, featuring young immigrant kids that had succeeded against all odds.”

The Tuli brothers were in their mid-20s when they made their first million, or rather $8 million.

The wide-format fax machine was a timely innovation and a huge hit. The brothers floated WideCom on NASDAQ. Corporate giant Xerox expressed interest in acquiring the company, but the Tuli brothers passed on Xerox’s offer.

In hindsight, one can bemoan their decision was a bit short-sighted, however, in the long run, it helped Raja and Suneet to explore new and emerging technologies, instead of resting on one laurel.

The brothers launched Datawind Inc. in 2000.

“We always had our father’s support and learned from his willingness to lose and risk things,” Suneet said. “Our father paid for our tuition and the seed fund for the fax machine. Having his backing told us, it was OK to risk and lose. But, that early success also provided us with confidence.”

Stay tuned. In the next part, Toronto Desi Diaries will reveal how the world’s least expensive tablet/phablet has been able to connect profit margins with philanthropy.