India's $US35 tablet caught up in disputes, less than 10,000 shipped

DataWind, the tablet's maker, now hopes to boost sales with new models and new contract manufacturers

India's US$35 tablet has yet to take off, with less than 10,000 units of the device released to the market since its October launch, despite considerable interest from consumers, according to an executive of maker DataWind.

The Android tablet project has been hit by disputes between DataWind and a government-run educational institute over test criteria, and more recently a dispute with the contract manufacturer, which complained that DataWind owes the company US$1.12 million.

DataWind bagged a contract from the Indian government to deliver 100,000 units by the end of December, which was later delayed to March 31 so that the company could deliver an upgraded product. But deliveries to the Indian government ground to a halt after a dispute over test criteria and specifications with the government-run Indian Institute of Technology in Rajasthan, DataWind CEO Suneet Singh Tuli said.

The contract manufacturer, Quad Electronic Solutions, said in a statement on Monday that it had warned DataWind that the product did not meet reliability standards, and fully understood why the educational institution had rejected it.

The amount claimed by the contract manufacturer as dues is incorrect as it only made 10,000 units, of which 600 were retained by IIT Rajasthan, and about 5,000 each were sold by Quad and DataWind in the open market, Tuli said. "If Quad thought the product was unreliable then why did they sell the product in the open market?" Tuli asked.

DataWind has served a legal notice to Quad, alleging that the company offered to make a tablet directly for IIT Rajasthan, infringing DataWind's intellectual property, Tuli said. Quad said it had tied with IIT Rajasthan to design and make converged devices, but not a tablet like DataWind's product.

DataWind's nongovernment sales to more than 3 million consumers who had preordered the device without payment since December have also not taken off, partly because of the dispute with Quad, Tuli said. The company had to quickly sign up a new contract manufacturer.

Some of these customers have paid to get expedited delivery, and after a six-week delay DataWind plans to launch the project on April 26, when it will announce new configurations, order volumes and shipment schedules.

The company has meanwhile updated the device to the second-generation Aakash 2, which will have a 7-inch capacitive multitouch screen and a single-core, 800MHz ARM Cortex-A8 processor, faster than the earlier 366MHz processor. The device will ship to consumers at rupees 3000 ($57) and will include Wi-Fi and GPRS.

The same device will also be sold at rupees 2276 ($43) to the Indian government under the original 100,000-unit contract. The deal is now to be managed from the government side by another educational institution, IIT Mumbai, but it could take until May for the process to resume, and much later for new orders to come, Tuli said.

The two educational institutions could not be immediately reached for comment.

DataWind still hopes to make money by selling the device to the government at the $43 price, as component prices have since fallen. The Indian government will subsidize the price of the device further to $35 before offering it to students.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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John Ribeiro

IDG News Service
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