The breakthrough low-cost Android-based tablet to be launched in its commercial version as Aakash2 early next year, could turn out to be a billion dollar property for Datawind, the Canadian company behind the device.
According to the company’s CEO Suneet Singh Tuli, Datawind expects to sell five million units of the gadget in India in 2012. That will take the company’s revenues from about $10 million at present to over $250 million in one year, from the sales in India alone. “The opportunities from other countries may make it three or four times that,” said Tuli. In an interview in Toronto, Tuli said their sales forecast for India was based on bookings and enquiries received for the $60-tablet so far.
Datawind says it has 400,000 pre-bookings in the bag, and “expressions of interest” for another three million units from bulk buyers like corporate and institutional customers. Apart from these, in the coming weeks the company expects to announce a deal with a large private educational institution that runs over 26,000 schools with around 17 million students. Tuli declined to identify the institution, but pointed out, “Even if they decide to equip 20 per cent of their students, that’s 3.4 million units”. He added that more such announcements could be expected over the next several months.
Tuli also said Datawind expected to finalise deals with two more subcontractors in Noida and Kochi for production of the Aakash2 tablets in order to meet the anticipated demand. He said the facility in Hyderabad that is currently producing the devices was ramping up to roll out 5,000 units a day. By the end of March 2012, Datawind plans to have each of the three facilities acquire the capacity to turn out one and a half million units annually.
Datawind has supplied 10,000 tablets so far of the initial order from the Government of India, and will complete delivery on the order for 100,000 tablets in the next couple of months. It is also bidding for the next order from the National Mission on Education through Information and Communication Technology, or NME-ICT, which according to Tuli, is expected to be for three million units.
Users of the Aakash2, who will initially pay Rs 99 a month for mobile internet access, can expect to see this cost brought down to zero within 6 to 12 months, says Tuli. He believes it will take about 200,000 users to hit the critical mass at which Datawind can start using advertising revenue to offset the cost of internet access.
However he cautioned that any such model would have to be approved by India’s telecom industry regulator.
“There’s still a lot of uncertainty in India on Friday with the network operators, what they can do, spectrum sharing and other issues that they are concerned about. So while this could be a very positive business model both for the consumer and the operator, I think the dust needs to settle on many of the things that are going on in the telecom side in India for this to happen,” said Tuli.
