Government's replacement warranty policy places the Aakash at $49

The Indian Government’s dream project, the world’s cheapest tablet PC Aakash was a success as it was recently released. Aakash is being produced at less than $35 per unit but the replacement warranty has increased its price to $49.98 per unit with a $14 increase.

According to Suneet Singh Tuli, the CEO of Datawind, the company manufacturing the tablet, the Indian Government has asked for a replacement warranty and not to repair the tablets, which he believes as a big cost. He further explained that the ratio of defects in a device sold in India to the same in America is very high as the climatic conditions of India are very harsh.

Though the actual manufacturing cost of the device is less than $35, but thanks to all these conditions the price has been increased to Rs2200 ($49) per unit.

To ensure complete transparency and a level playing-field, the National Mission on Education through Information and Communication Technology (NME-ICT) decided to task IIT Rajasthan, Jodhpur, with the job of procuring and testing the devices. They have also floated tenders which were close to the cost mentioned by the minister. And the final price with all the expenses included landed out to be as Rs. 2276 ($49.98).

Tuli said that Datawind is making enough profit in developing such a low cost device and selling it to the Indian Government, from which he donates 10 percent of the total profit to charity. He also added that the company will also release a commercial model of Aakash in the market with a price tag of Rs. 2999 ($61), which will carry a 30 day replacement warranty.

He added that he would sell the device to the government for $35 (Rs. 1750) if they order 1 million units. Currently, they have an order of 100,000 units for supply, to the Indian Government.

Source(s)