Thursday, January 5, 2012

Aakash tablet: Oversold, underperforming


Within days of going on sale online, the 2,500 rupee (about $47) Aakash computer appears to be sold out, according to the tablet's official Web site.

The tablet has generated huge excitement among gadget geeks and internationally renowned columnists alike, who say the product could advance education in India and revolutionize the lives of the world's poor. But it has been dogged by complaints about its performance and delivery delays.
DataWind, the company that designed the tablet, started selling it online on Dec. 14, next to the tablet's slightly more expensive cousin, the UbiSlate7+. In less than a week 60,000 Aakash orders were placed, said Suneet Singh Tuli, the chief executive of DataWind, in an interview.

That is when DataWind stopped taking more orders for Aakash, and it won't sell any more of the tablets, Mr. Tuli said. Instead, the Aakash is being revamped in response to user demands, he said.

Aakash, originally designed for college and university students in India, was first unveiled here in New Delhi in October with great fanfare. The Indian government said it had already ordered 100,000 tablets, which it would distribute at a subsidized price of $35 each, and 500 were given free to students invited to the launch event.

The news hasn't all been good since then.

"Aakash looked like a decent device for students and early adopters of technology," said Sandeep Budki the executive editor of The Mobile Indian, a Web site that reviews information technology products across India. But compared to similar products available in India, including Beetel's "Magiq" tablet and the Reliance tablet, "the performance was sluggish," Mr. Budki said.

Anecdotal feedback, through media reports from students and others about Aakash, led DataWind to believe it needed to add some upgrades, Mr. Tuli said. These include a faster processor, a longer lasting battery, GPRS, an option to add a SIM card and phone functionality.

Adding these upgrades could take until the end of January or early February, he said.

The negative feedback and complaints about delays led to criticism that the project was flailing, Mr. Tuli said, adding that "to quell that we decided to put both Aakash and UbiSlate7+ for sale online on Dec. 14."

Even before the commercial version of the cheap tablet officially went on sale, consumer demand had been massive, Mr. Tuli said. After the Aakash was unveiled on Oct. 5, about 300,000 people pre-booked the UbiSlate7+ over the next six weeks, Mr. Tuli said, through the official Web site for the Aakash tablet, the DataWind Web site and ubislate.com.

The UbiSlate7+ was originally scheduled to hit the markets between November end and early December. Between Aakash and UbiSlate7+, DataWind has received pre-bookings for over a million tablets. Satisfying all these orders could take several months.

The government will have their order of 100,000 tablets completed by March, Mr. Tuli said. All of these will be the upgraded version, UbiSlate7+, but will cost the government the same price as Aakash, or $49.98.

Of the 60,000 commercial orders for Aakash, 30,000 customers will receive the original Aakash tablet, which will be delivered within the next two weeks, Mr. Tuli said. The rest of the users will actually receive UbiSlate7+ tablets, but without paying extra for them.

UbiSlate7+ deliveries will not begin before the end of January or the beginning of February. When Aakash was put on sale online, DataWind had an inventory of only 30,000 Aakash tablets. "The overwhelming response that we received gave us limited response time and we over booked for Aakash," Mr. Tuli said.

At present, manufacturer Quad Electronics in the city of Secunderabad, is producing fewer than 700 tablets a day. The production of new microprocessors for the upgraded tablet has slowed production, Mr. Tuli said. DataWind is hopeful that by mid-January they will boost up the factory's production capacity to 3,000 tablets per day.

In the next three months DataWind also plans to add three additional manufacturers in India: one more in Secunderabad, one in the city of Kochi and one in the northern industrial district of Noida. Each of these is also expected to produce 3,000 tablets per day, Mr. Tuli said, for a total capacity of 12,000 tablets a day. By the end of January, DataWind hopes to have 100,000 tablets ready.

"We underestimated the market here," Mr. Tuli said. "Analysts said that in India there is a market for only a quarter of a million tablets a year."

A large number of cheap Android-based devices will emerge across the world in 2012, said Jon Russell, Asia editor of The Next Web, an online publication that tracks internet technology trends worldwide. As the second in line, after Aakash, "the UbiSlate may not be so fresh, and it will be interesting to see how it is received by the public," Mr. Russell said.

While Mr. Tuli would not divulge manufacturing costs for each unit, he said it was "sub-$40 with a very respectable margin." Because the rupee isn't doing well against the dollar, profit margins have been hurt, he said, adding that there is more room for manufacturing costs to come down.

"Making profit or loss in the short term is irrelevant," Mr. Tuli said. "We want to make a product with good features in the long term. My reputation is at stake."

In the next 45 days, the Indian government will float another tender for a few million tablets, Mr. Tuli said. "Right now they are defining the specs for the next generation of Aakash, likely to be known as Aakash 2 and Aakash 3. We will bid for it and we hope to win.