Datawind Ltd.'s motto is "Bridging the Digital Divide," and with the introduction of a $20 tablet to the Indian market, it could be doing just that. The "Aakash-2" tablet, was commissioned by the Indian government, will only be available through the government and is meant for student use. Nonetheless, some are saying that this could be a game changer in the market overall.
The Times of India reported that native company Micromax led second quarter sales of tablet in that country followed by Samsung and then Apple. Aakash is positioned to compete with Micromax in a market where "close to 90 vendor launched tablets in Q2."
Aakash-2 was launched on November 11, but success is not guaranteed. The first gen tablet from the prior year was not accepted by the government and DataWind was forced to redesign. With an order of 5.86 million units on the line, the price point here has launched a war of words among executives of rival manufacturers with one telling the Times: "It is not possible to give a tablet below $50."
Aakash actually is sold to the government at $40 and it is subsidized so that the cost to students is $20. A commercial version is sold for closer to $65. Even still, a tablet with grown up functionality at that price point is unheard of in the U.S. market. Tablets meant for children only here start at around $100.
Chief executive of DataWind, Suneet Signh Tuli told the Times that cost savings comes from designing the tablet to integrate several components. According to the article, "He cites the example of the printed circuit board, which comes embedded with a chip, RAM, flash memory, power circuits and the WiFi module. So, while his peers pay $30 for all this, Tuli says his cost works out to $16.50."
Disrupting the Market
Quartz.com said that India has 900 million cell phone subscriptions, though smartphones are rare, and 95% of Indians have no computing device. Admittedly the bandwidth and even existence of a network at all is lacking in most of the country, but when it comes to the Aakas-2, Quartz.com reported that: "Even jaded U.S. gadget reviewers have found it as usable as tablets costing many times more."
Vivek Wadhwa, an entrepreneur and academic told Quartz.com, "The revolution will come from the developing world to the U.S. These tablets will kill the markets for high-end players — for Microsoft in particular."
The 2012 Mobile Enterprise/451 Research report, "State of the Enterprise Tablet Market," already shows that 1 in 5 companies are issuing tablets and that the majority of those who don't, support tablets as part of a BYOD policy. With Gartner predicting that tablets will replace PCs by 50% in just a few years, and nearly 20% of tablets shipped going to business in Q2, devices such as the Aakash-2 are bound to be disrupters.