DATAWIND- Making Computing Affordable for All Date:   Friday , August 31, 2012 In a time when the likes of Apple and Samsung are dominating the tablet market globally, a relatively small company, DataWind turned the spotlight on itself when it brought out the world’s low cost tablet Aakash in accordance with the MHRD with a target price of $35. Today a year later, the company is riding high with an order book of over 35 lakh units since the launch. But achieving such a mass demand in a short span was not a bed of roses for DataWind founders Raja and Suneet Tuli. In fact, in the past one year, the company had its fair share of challenges, criticisms and roadblocks before they set out the launch of the product. A pioneer in developing low cost hand held internet surfing devices, DataWind draws its legacy from one of its original products – Ubisurfer Netbooks that it launched in 2009. Back then smartphones and tablets were more like the gadgets of interest of the elite. A common man would not think of owning a smartphone but at the same time desired a mobile gadget that he could use to surf the web while on the go. This was the idea that triggered Tuli’s thoughts into developing a low cost surfing device – Ubisurfer; a product launched much before the the iPads, Tabs and Playbooks took the market by storm. A perfect opportunity arrived for the company when the government of India had decided to procure a low price tablet with intent to distribute it to all educational institutions and encourage e-learning as well make Internet more accessible to all students. But today, the company is looking much beyond the students and hopes to reach out the masses with its new tablet – Ubislate. Even with heavyweights like Samsung, Apple in the industry, there still is 80 percent of the market left untapped. In a country like India, a tablet’s success majorly depends on affordable price point. The only way a company gets a share of the market is by delivering products to people and firms who are looking for an advanced technology at an affordable range. This is the strategy being employed by Raja Singh Tuli, Chairman and Suneet Singh Tuli, CEO of Datawind. Breaking the Technology Barrier “Our earliest product, Aakash was an eye opener of sorts and helped us understand the market demands,” explains Tuli. The company realized that despite the consumers being price sensitive they look for quality too. An average user looks for at least half of apps/provisions in his low cost tablet that he would see in an iPad or so. And if he gets something more that a high end tablet would not provide, then it’s a bonanza. This is exactly what Suneet learnt with the release of Aakash. With the first version of Aakash, the company had a price target of $35 with in which the company not only had to roll out the tablet but also provide e-books, a YouTube channel with 10 thousand hours of free online lectures. Another roadblock was that IIT Rajasthan insisted the device had to be waterproof, shockproof and so on. That contradicted the whole point of the price tag. “The price point was so low that the only thing one could imagine purchasing at $35 is a cover for iPad, let alone a fully functional Android tablet,” says Tuli. Despite the roadblocks, the company did manage to release its product. Unfortunately from a certain segment of the media who compared the Aakash with high-end products at ten times the price, and didn’t fully understand the primary purpose of the product, it met severe flack. “As per the instructions of the government, the initial product was designed for specific educational purpose and with the given price point we managed to achieve it. But what we did not realize is that consumers and media expected a product that they touted to be an iPad killer,” he adds. As a result, DataWind offered recommendations to the government for an upgraded version of Aakash, and the Ministry of Human Resources & Development transferred the project to IIT Bombay to procure Aakash-2 from DataWind. For the consumer markets, Raja and Suneet realized that if the company had to have a fighting chance of surviving the market demands, they had to address not only consumer expectations but also have an edge that other players in the market did not. Today, the only way to access internet on a mobile device in the country is via wi-fi or 3G. While the broadband penetration is on the rise, it is not enough. Not all the people with a mobile device have a broadband connection. Also the 3G connectivity continues to be expensive for a common man and has limited geographical access. This is an issue that DataWind has successfully addressed through its proprietary technology for which it has received 18 Patents in the U.S. The company’s tablets deploy a compression acceleration technology which allows web delivery on normal GPRS or basic EDGE network and give you the same experience as a broadband or 3G when browsing Internet. In addition, most tablets today are built only for using Internet and related applications. Apart from Samsung, no other player has successfully integrated the call facility in a tablet. DataWind is the only player in the low cost category that has successfully managed to provide the same in all its products. The built in cellular modem allows you to use a SIM card to not only make calls but also access internet on the go. These two facilities have given the company a great edge over its competitors. Since, Akaash tablet continues to be a government initiative for educational purposes, Raja and Suneet have set out to tap the consumer market with the Ubislate series of tablets costing as little as Rs3,500. All models of UbiSlate tablets incorporate HD video co-processors for a high-quality multimedia experience and core graphics accelerator for faster application support. These tablets are the only Android devices in the market to offer DataWind's UbiSurfer browser, based on 18 international patents. The UbiSurfer browser accelerates web pages by factors of 10 to 30 times, allowing for a web experience who's speed is unrivalled. Internet access is available everywhere on a GPRS network at Rs.98/mo. for 2GB. The devices include WiFi & GPRS connectivity allowing anytime & anywhere internet access and phone functionality. Optional 3G modems are also supported via USB. In addition to a micro-SD card slot, a full-sized USB port is integrated into the unit allowing pen-drives, external keyboards, web-cams, dongles and other inexpensive peripherals to be attached. "Our basic objective is to reposition tablets as anyone's first computer instead of a sophisticated alternate to smartphones and laptops," Tuli explains. The Great Consumer Demand With Ubislate tablets, the company has managed to provide to the consumers all the things they desire for and more from a tablet and the success of the product can be seen in the tablet fever that has caught Indians. While the government has budgeted for 50 lakh units from MHRD, 26 lakhs units form UP and three lakh units from the government of Punjab; at the consumer and enterprise front too, the demand has been magnanimous. But this is just the beginning. According to Tuli, the potential growth rate of affordable tablet market in India will be over 200 percent for next few years. “I am sure in the coming years there will be a shift from high-end to affordable dominated market. Our order bookings for Ubislate series are already in six-figures," he says. With over 80 percent of the tablet market still up for grabs in the country, several home grown players are trying to take a bite of the pie. Companies like Spice, HCL, Zen, Micromax and more have rolled out their own tablets. These are the same companies that have previously achieved success in rolling out low cost smartphones. What works in favor of DataWind in this cut throat competition is its first mover advantage through the limelight it gained because of Aakash tablet. This apart, Suneet has taken a different marketing approach for the consumer/enterprise demand. Instead of going retail like the others, Suneet is focusing on building a strong channel partnership that will help the company take it s products far and wide. Since, the products are available on pre-order only, the company has ensured that the channel partners understand and convey the same. The strategy seems to working for the company has been witnessing a steady rise in orders, the current total being 35 lakh units. While the demand is seeing a steady rise, at the same time the company is battling challenges like meeting the demand - supply gap. Suneet agrees that despite an early release of the product, the company is yet to supply even a quarter of the order size. The delay has been due to overwhelming demand that exceeds 15 times the size of the total Indian tablet market in 2011. Being a small company, one does not have surplus cash flow to experiment. When we do an upgrade we have to be 100 percent sure as we cannot afford any kinds of risk. For example, RIM launched its Playbook in a hurry to compete with the iPad and in the process brought out a product that was not upto consumer satisfaction. As a result the company lost as much as $500 million. This is something a small company cannot afford to do. “While we slowed down in between to upgrade our products, we were boggled with the sheer size of the number of orders. Though we started to rollout 3000-4000 units a day, we still have a lot of catching up to do. But the good news is that while most of our early orders are for the earlier version, we supply the consumers with the upgraded product at no extra cost,” says Suneet. In the long run, Suneet Singh Tuli is confident that he and his competitors are going to see a much bigger demand for their products. The tablet market in India is going to be 100 times larger than what the iPad sees in U.S. Just like the revolution that the mobiles brought within the country; tablets will drive the next computing revolution in India. Mobiles penetrated the user base so deep that even an illiterate person easily manages to navigate his way across a mobile phone and use it. It is the same penetration that tablets will achieve if one makes it affordable. And this is what Suneet is set to achieve with Ubislate & Aakash.