Affordable tablet maker Datawind will foray into low-cost smartphone making and has plans to set up three manufacturing units, one of them in Andhra Pradesh. The phones will be priced at Rs.1,999 and come with free internet for 12 months intending to tap the feature phone market that accounts for about 1.4 crore every year in India and convert such users to smartphones.
In keeping with the “Make in India” campaign, Datawind plans to set up three units, one of them in Visakhapatnam or Vijayawada with a space of 50,000 sft, Datawind CEO Suneet Singh Tuli told reporters here on Wednesday. Another plant will come up at Amritsar and the third one in Central India.
The three units together will have a capacity to make 50 lakh phones. The first unit will go on stream in 90 days and the others will follow. “We are looking at the IT policy of Andhra Pradesh and are quite upbeat about the quality educational facilities and are keen on coming here,” he said.
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The three units will be set up investing Rs.165 crore it has raised in an IPO on Toronto Stock Exchange.
The idea was to make internet available to those who could not afford to buy expensive smartphones, Mr. Tuli said pointing out the Chinese businesses were driven by Internet access.
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In a reversal of policy, the budget for the current year has increased duty on finished phones from 6 to 13.5 per cent and for assembling brought it down to zero per cent.
Mr. Tuli estimates that about 15 crore phone users would switch to the zero duty category and Datawind aims to capture about 3 per cent of that market.
Datawind, known for making the low-cost Akash tablet (now Ubislate), has 16 to 18 per cent of the overall tablet market and 55 per cent of the sub-Rs.5,000 market selling about 1.5 lakh of the 2.55 lakh tablets.