DataWind’s $35 tablet mired in lawsuits, only 10,000 shipped so far

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, an executive of maker DataWind said Monday.
The Android tablet project has beenhit by disputes between DataWindand a government-run educational institute over test criteria, and morerecently a dispute with the contract manufacturer, which complainedthat DataWind owes the company US$1.12 million.

DataWind and the Indian governmentare pointing fingers at each over the slow sales of the Aakash tablet,shown above.

DataWind bagged a contract from the Indian government to deliver100,000 units by the end of December, which was later delayed to March31 so that the company could deliver an upgraded product. Butdeliveries to the Indian government ground to a halt after a disputeover test criteria and specifications with the government-run IndianInstitute of Technology in Rajasthan, DataWind CEO Suneet Singh Tulisaid.
The contract manufacturer, Quad Electronic Solutions, said in astatement on Monday that it had warned DataWind that the product didnot meet reliability standards, and fully understood why theeducational institution had rejected it.
The amount claimed by the contract manufacturer as dues is incorrect asit 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 didthey sell the product in the open market?” Tuli asked.
DataWind has served a legal notice to Quad, alleging that the companyoffered to make a tablet directly for IIT Rajasthan, infringingDataWind’s intellectual property, Tuli said. Quad said it had tied withIIT Rajasthan to design and make converged devices, but not a tabletlike DataWind’s product.

DataWind’s nongovernment sales to more than 3 million consumers who hadpreordered the device without payment since December have also nottaken off, partly because of the dispute with Quad, Tuli said. Thecompany had to quickly sign up a new contract manufacturer.

Some of these customers have paid to get expedited delivery, and aftera six-week delay DataWind plans to launch the project on April 26, whenit will announce new configurations, order volumes and shipmentschedules.
The company has meanwhile updated the device to the second-generationAakash 2, which will have a 7-inch capacitive multitouch screen and asingle-core, 800MHz ARM Cortex-A8 processor, faster than the earlier366MHz 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 Indiangovernment under the original 100,000-unit contract. The deal is now tobe managed from the government side by another educational institution,IIT Mumbai, but it could take until May for the process to resume, andmuch later for new orders to come, Tuli said.

The two educational institutions could not be immediately reached forcomment.
DataWind still hopes to make money by selling the device to thegovernment at the $43 price, as component prices have since fallen. TheIndian government will subsidize the price of the device further to $35before offering it to students.

John Ribeiro coversoutsourcing and general technology breaking news from India for The IDGNews Service. Follow John on Twitter at @Johnribeiro. John’s e-mailaddress is [email protected]

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