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DataWind boss reveals secret behind US$35 tablet

Nestor Arellano | Jan. 9, 2012
Four hundred thousand, that was the number of units pre-ordered in October last year by people eager to get their hands on the commercial version of the Aakash Tablet, the world's cheapest tablet device, slated for release this month by Montreal-based tech upstart DataWind Inc.

Founded in 2000 by the Tuli brothers, the company has had reasonable success in making and selling low-cost wireless gadgets such as PocketSurfer (a clamshell web-enabled mobile device) and the mini netbook UbiSurfer in the U.K.

For entrepreneurs like Suneet, who focus on low-cost digital products for the disenfranchised, markets like India (and China, Asia, Africa and Latin America) are what's referred to as the "next billion."

The idea is to make more money through selling low margin devices to a greater number of people, said Tuli. "Why chase after the next million buyers when the next billion is just waiting to be served?"

Not in my backyard

NIMBY is often used pejoratively. But many Canadian tech startups have had to adopt a sort of reversed version of NIMBY in order to thrive. Many Canadian SMBs found it necessary to take a global approach to help their business prosper.

"Look at the global market, don't focus on your own backyard," advices Tuli. In his case, Tuli lives in Toronto, DataWind has a research and development office in Montreal, and sold most of its earlier products in the U.K.

Parlaying the Tulis' knowledge of India's mobile market and other local business connections enabled DataWind to secure the Indian government contract.

Recently, Tuli has been fielding inquiries from officials of other countries interested in the bargain basement tablet. The list includes the minister of information and communications for Thailand, who wants 10 million tablets, and officials from Turkey, Sri Lanka, Trinidad, Tobago, Egypt and Panama.

Follow the money trail

DataWind also took noticed of global investing trends. The company has its headquarters in Montreal but is actually registered in the U.K. This is mainly because most of DataWind's investors come from across the pond.

"For some reason the investor community in the U.K. is more proactive. Canadian investors tend to be more conservative," according to Tuli.

Cut production margins

DataWind is able to profitably manufacture the Aakash and Ubislate 7 because the company managed to squeeze out the smallest margin from its components.

Tuli says they are able to do this by sourcing components from various manufacturers that offer the best price for the specs they need rather than sticking with a single manufacturer.

This enables DataWind to realize deep discounts on key components. For instance, Tuli explains, many tablet markets spend anywhere from $15 to $20/unit on their LCD screens. DataWind was able to cut down the price to $8/unit because the Montreal firm purchases uncompleted units. "We do the rest of the gluing and soldering needed to finish the job," says Tuli.

Touchscreen panels can cost more than $20 per unit but DataWind was also able to source much cheaper panels from another Montreal firm.

 

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