A $35 tablet for the next 3 billion customers

AakashHow can you create a “good enough” product and sell it to a large market craving for equal access to education?

Suneet Singh Tuli sells the world’s cheapest tablet at $60 a piece to India’s 1.2 billion people. His Aakash tablet is proving that frugal innovation thrives in markets where a “good enough” product is all that matters.

I met Tuli recently in Phoenix and held Aakash (meaning sky in Hindi) in my hands.  The tablet doesn’t have the finesse nor looks of an iPad or a Galaxy 4.

However, the 7 inch screen tablet works and is “good enough” for Tuli’s intended audience- the next 3 billion people living on less than $150 a month. The Indian government has ordered 100,000 Aakash tablets and his company, DataWind, has sold over 800,000 tablets in India.

Aakash sells commercially in India for approximately $60 a piece but Tuli wants to bring it down to $35 a piece. It has a 7 inch touch screen, 4GB capacity that can be expanded to 32 GB, uses a Cortex A 8 microprocessor and runs on an Android 4.0.3 platform. The device is sold to the Government of India at $50 a piece and is then provided to University students.

For the last two years, Tuli’s life has had a “surreal” existence as he calls it. For close to a decade, he has been toying with the idea of creating a product that would improve education for children in India, most of whom live in rural areas. Using patented technology from his company, DataWind, he created the Aakash Ubislate tablets.

Frugal Innovation and the Numbers Game
Tuli believes in frugal innovation and the numbers game. India has 360 million school-age children of whom 140 million in the K-12 sector do not have access to education. 70% of the school going population lives in rural areas and are taught by mediocre teachers.

Tuli believes that “computing internet access” could solve the problem of mediocre teachers in rural villages. A big fan of the  Flip classroom, Tuli says his cheap tablet will help teachers provide better, highly interactive content delivery.

Tuli  believes in a hub and spoke model where high quality teachers in metro areas could use technical gadgets like Aakash and serve as mentors for teachers in rural areas.

His Business Model: “The Good Enough” Factor
Tuli’s business model relies on a robust and perennial cultural concept that is uniquely Indian. Indian parents staunchly believe in the value of education. They will sacrifice personal comfort to provide quality education for their children and this transcends demographic barriers. The craving to provide education is woven in the social fabric of the country and is not going anywhere. This is Tuli’s strategic advantage and his long-term market opportunity.

He draws inspiration from Harvard professor and management thinker Clay Christenson’s theories on “disruptive innovation.” Tuli believes that once a technology gets deployed and hits the mass market over a period of time, a stage will come when offshoots catch up and seek  the “good enough” market.

“Inexpensive and good will always win over and affordability is what we are aiming for,” Tuli says.

He has carefully assessed the Indian demographic advantage to sell a product that he believes is “good enough.”

“There is a demographic in India that believes in affordability and not a cost-conscious market. The demographic advantage needs to be exploited in a way that is presented to them,” he said.

In 2011, Apple and Samsung cornered an 80% share of the tablet market in India. Tuli was eyeing just the remaining 20%. But in In less than two years, Aakash has upset the apple cart and has made deeper inroads.

A company that began with a $5mn in annual revenues is now raking in atleast $100 million in revenues. However, he has had his fair share of criticism ranging from delayed orders to negative media and even bad comments including people calling him a “crook” who exploits gullible populations in developing countries. He seems unfazed by those remarks and is staying focused on the “good enough” market.

Tuli has a contract with the Indian federal government to supply 100,000 tablets which will be used for University education. India plans to equip 220 million students with low-cost tablets over the next 5 to six years so that every child in India has access to a computer. The government wants “education to be free- a fundamental human right and not based on an economic right.”

He says this is a “contagious concept” that has created much needed publicity for his product. Aakash is now being used as a pilot to reform education in 13 countries and UN Secretary General Ban Ki-moon recently launched Aakash 2.

Tuli has framed Aakash’s revenue model on collaboration. Software is mostly through apps and collaborative work with developers. He works with NGOS, teaches them coding, sponsors hackathons and also uses resources like Khan Academy for content. He believes in freemiums and thinks that a “killer app is now the Internet.” For instance, he has partnered with Internet service providers in india to offer unlimited Internet access at Rs 100 ($1.70) a month and believes he will make money through an ad revenue model.

For now, the “good enough” market has accepted his frugal innovation. And, his target is the next 3 billion.

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