On the evening of Dec. 12, as any doting father would, Suneet Singh Tuli headed off to Castlebrooke Secondary School’s auditorium in Brampton, where his daughter would be playing violin in a Christmas concert. When he got back home, he took a nap. Then he woke up, as planned, for a series of interviews with media outlets in New Delhi and Mumbai that lasted from 10:30 p.m. until about 4:30 in the morning.
Mr. Tuli may reside in the suburbs of Toronto, but he is now engaged in a battle for tablet and smartphone supremacy in India against some of the world’s largest and best-known technology companies, Samsung Electronics Co. Ltd. and Apple Inc.
The most surprising thing about it all is that Mr. Tuli’s small Canadian-owned company, Datawind Innovations, is doing remarkably well. In the first quarter of 2013, Datawind sold more tablets in India than Samsung, while year-to-date figures from September 2013 show Datawind sold nearly twice as many tablets as Apple in the country, which is one of the world’s largest and most fast paced wireless markets.
“It’s been a fun ride,” Mr. Tuli, Datawind’s CEO, said over lunch at Brar’s, a popular Brampton restaurant known for its vegetarian buffet and selection of Indian sweets.
Datawind, which is registered in the United Kingdom but run mostly out of Canada, first gained fame for its incredibly cheap tablet computer, Aakash, which is named after the Hindi word for “sky” and has multiple models that cost as little as $37.99.
The low price is the result of Mr. Tuli’s business strategy: To reach the billions of people out there who can’t afford a device to connect them to the Internet, mainly in the developing world’s emerging markets, but also in poor pockets of western countries.
The company’s motto is “Bridging the Digital Divide”.
Between January and September of 2013, Datawind sold 431,793 tablets in India, slightly less than Samsung’s 507,140 and well above Apple with 223,902, according to Indian research firm Cyber Media. Datawind is also seeing strong sales in Mexico and Nicaragua.
“Often, when we think about tablets, we think about the high-end market, the market primarily in the western world,” said Chetan Sharma, a mobile industry consultant who has worked with Microsoft, China Mobile, Samsung and AT&T.
“But clearly there is a huge, pent-up demand for a cheaper tablet that might not have all the bells and whistles but is good enough to do the job.”
Tablet giants such as Samsung and Apple may dabble with smaller devices, at various price points, but Datawind’s strategy is unique, Mr. Sharma said.
This is because the small company comes with none of the baggage of a larger player: Unlike Amazon.com Inc., Datawind is not concerned about selling content; unlike Samsung, it doesn’t care about hurting the profit margins on its higher-priced products; unlike Apple, it’s willing to experiment with radical retail distribution.
Mr. Sharma said one of the most interesting things about Datawind is its ability to strike deals with carriers around the world that enable the company to sell some tablets with one year of Internet connectivity bundled in with the purchase. (It does not have any such deal with Canadian wireless companies.)
Now, after having undercut the giants to sell tablets to the world’s poor, Datawind is launching smartphones.
“We’re launching this tomorrow in India,” Mr. Tuli said during a December interview, holding out a five-inch, Android-powered smartphone. It is one of the three smartphones Datawind is launching, ranging in price from $60, below even the most affordable smartphones – such as the Samsung Pocket, which retails for about $120. It is the reason why he will be taking calls all night from Indian media.
There are sound business reasons why larger tech companies avoid this route. Jitesh Urbani, an analyst with research firm IDC who monitors tablet shipments worldwide, said companies that focus on low-cost electronics tend to source a variety of components in order to build the cheapest device possible, and then often pursue large-scale contracts with governments in emerging markets that hope to subsidize the device for education purposes. Often, these contracts can fall through or be delayed for political reasons.
Datawind, in particular, faced an epic struggle with a massive government contract in India. After winning the deal, the government kept changing the desired specifications.
The company was attacked in the Indian media after some reviews said the Aakash tablet was slow and fragile. To make a tablet for less than $50, Datawind uses much cheaper components than its larger competitors.
The business involves a large amount of risk and comes with very low profit margins. Where Mr. Sharma sees vast opportunity, Mr. Urbani is skeptical that companies selling cheap tablets will find sustainable success.
“We don’t expect that trend to last for that long, because at the end of the day these devices don’t offer a very good experience,” Mr. Urbani said. “And also, prices have come down from the top tier vendors, though not significantly. You won’t find a top tier vendor with a sub-$100 price tag.”
Despite Mr. Tuli’s gruelling travel schedule – he just got back from a trip through London to Delhi and Zambia, and will soon be travelling across the U.S. and to Nicaragua – and the pressures of the industry, the entrepreneur seems quite at peace.
He has begun doing more work with NGOs, trialling tablets as part of development projects in Niger and Rwanda with World Vision Canada, as well as in the U.S., where entrepreneurs are trying to inspire disadvantaged youth to learn how to program software applications.
“Our whole focus from day one has been Internet connectivity,” Mr. Tuli said. “We persevered. It’s been interesting.”