Q&A: Is the world's cheapest tablet from India made in China?

DELHI -- Its maker says the "Made in China" charge is a "silly accusation" while looking to the United States market.
Written by Betwa Sharma, Correspondent

DELHI -- It’s been quite a ride for Suneet Singh Tuli, maker of the world’s cheapest tablet, whose device has been hailed by the United Nations as a breakthrough in information technology. But he has also been mired in controversy after media reports suggested that India’s tablet is being manufactured in China.

Tuli, an Indian-born Canadian, is the head of Montreal-based DataWind Inc., which in 2011 won the Indian government’s challenge to make the world’s cheapest tablet to be made available to 220 million students in coming years.

SmartPlanet is following the story of this Android-based tablet, called Aakash (sky), which has generated worldwide interest.

The first product, created by DataWind in collaboration with the Indian Institute of Technology, Rajasthan (IIT Rajasthan), was panned for its many defects. Last month, SP examined the difference between Aakash 1 and Aakash 2. The revised Aakash, designed in collaboration with the Indian Institute of Technology, Bombay (IIT Bombay), has passed muster with the critics.

The Aakash 2 tablet, being bought by the Indian government for Rs. 2263 ($41), will be made available to students for Rs.1130 ($20). Datawind was expected to ship the first order for 100,000 tablets by the end of December 2012. The company, which has only delivered 10,000 tablets so far, is now working furiously to meet an extended March deadline.

The commercial version of the tablet, called UbiSlate 7Ci, can be bought online for Rs. 4499 ($81). But slow manufacturing is causing delays in shipping orders to four million customers-in-waiting.

This week, SP speaks with DataWind’s chief about the China controversy, plans for the United States, manufacturing woes … and Aakash 3. For someone who has faced a tough press, Tuli appears remarkably upbeat about his ambitious venture.

SP: In your previous discussion with us, you said that Aakash had a market in the United States as well. Do you still think so?

SST: Yes, we believe that low-cost computing and internet access can provide value in the U.S. also. We regularly get school boards and other customers in the U.S. inquiring about purchasing product for their students. Watch out for upcoming announcements in this regard in the next few months.

SP: Any hints?

SST: Initially school boards, followed by commercial availability.

SP: The Indian media has reported that Aakash 3 is on its way. What's new about this tablet and will it be available at the same price?

SST: Although the specs (specifications) have not been finalized, the idea of having an embedded cellular modem and the ability to take a SIM in Aakash 3 seems to be getting traction. The government seems to be insisting that the price needs to come down further and meet their target of $35 as volumes increase.

SP: What about the commercial orders for UbiSlate tablet? How many have you received and how many have you processed?

SST: Four million people have pre-ordered. We’ve already delivered over 300,000. At the rate last year, we were the third-largest supplier in the Indian market. Our current supply rate to the market is significantly better than where we were four months back.

SP: Are you worried about the backlog?

SST: Yes, we’re certainly worried by the backlog, and unhappy that it is taking time to catch up to the demand.

SP: And what about complaints on quality?

SST: Our current defect rate on the UbiSlate 7Ci and UbiSlate 7C+ unit is less than 0.5%. On the older generation product, Aakash 1, there could have been mis-expectations of performance. But on the current product line, the feedback is very strong. Please feel free to forward me any complaints you come across regarding the current product.

SP: Turning to a bit of a controversy, the Indian media has reported that Aakash tablets are being made in China? Is this true?

SST: While many components are sourced in China, the final assembly and programming for the devices we supply to the government is done in India. This is sufficient for a ‘Made in India’ tag.

The key fact remains that ‘Made in India’ is not a requirement for our current project, and instead we are the ones who have pushed the government that ‘Made in India’ with pre-specified levels of indigenous value-additions be a requirement for future tenders. I believe the ‘Made in China’ allegation was a poor attempt to drum up a controversy, three days before the UN showcase. It is irrelevant to the project.

SP: But you’ve faced criticism for this –- world’s cheapest tablet from India manufactured in China. How do you react to that?

SST: Nobody ever implied that at the initial stages all 100 percent of the components would be made in India. Our reaction is to focus harder on the positive impact that such technology will have on India and the world, and not be distracted with silly accusations.

SP: Tell us about your manufacturing operations in India?

SST: Similar to Apple, Amazon and numerous other firms, we primarily use sub-contract manufacturers. We have four sub-contractors in India that will be producing Aakash devices within the next couple of months.

Additionally, we also do some product assembly at our facility in Amritsar (a city in Punjab). We are also establishing a touchscreen fabrication unit in Amritsar, which will be the first facility in India manufacturing touchscreens.

SP: What problems are you facing manufacturing tablets in India?

SST: Since the ecosystem of component suppliers does not yet exist in India, the materials management portion of manufacturing in India is challenging.

SP: So is manufacturing in China still working out to be the cheapest?

SST: The reason manufacturing in China is cheaper, is because the cost of inventory financing in China is significantly cheaper than India. Also, the cumbersome bureaucratic customs and logistics process in India impact costs.

Despite such difficulties, it would be a mistake for India to not nurture its manufacturing industries. It is also inaccurate to imply that no manufacturing industry exists in India. Last year, Nokia exceeded 500 million handsets made in India. I’m sure a tablet manufacturing industry can also be developed in India.

SP: You’ve been getting some bad press in recent months. Are you worried?

SST: While some glee in the prospect of this project failing, and seem to relish highlighting claims that it has failed, I don’t believe it impacts the reality.

The reality is that the Indian government is committed to low-cost computing and internet access to bridge the digital divide. They are willing to use their financial muscle to purchase large quantities to drive pricing down. We are passionate about using technology to help educate children globally and we will persevere in making technology more affordable.

PHOTO: Courtesy Suneet Singh Tuli

This post was originally published on Smartplanet.com

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