Mumbai: UK-based DataWind Ltd, maker of the Aakash tablet, is entering the low-cost smartphone category, which in India is dominated by companies such as Samsung Electronics Co. Ltd, Micromax Informatics Ltd and Karbonn Mobiles, with a range of three dual-SIM handsets with 5-inch touchscreens.

The models, to be “manufactured and assembled partly at the company’s facility in Amritsar and in China besides being sub-contracted in part, will be sold online till we make an announcement in the next few weeks about our retail strategy and tie-up with a cellular operator by the end of December", said Suneet Singh Tuli, chief executive officer of DataWind, over the phone from Montreal, Canada.

The entry-level device is the PocketSurfer 5X at 3,499 with a dual-SIM smartphone, Linux operating system (OS) and 5-inch resistive touchscreen.

The second is PocketSurfer5, priced at 4,999. PocketSurfer5 offers the Android Jelly Bean (4.0) platform and sports a 5-inch capacitive touch screen. The third model is the PocketSurfer3G5, priced at 6,499 with the Android 4.2n platform, which also comes with a 5-inch touchscreen.

“Our primary focus is to deliver an affordable means of accessing the Internet. We want to be form-factor agnostic. Globally, the massive shift from feature phones to smartphones is being driven by the appetite to get on the Internet. We want to be the enabler," said Tuli.

Tuli wants to replicate the “success" of Aakash, touted as the world’s lowest-cost tablet, and “bridge the digital divide" with these smartphones but analysts point out that the first two versions of Aakash ( first version priced around 3,000 and the second version around 3,500) were poorly made, poorly assembled and cumbersome to use, testing a user’s patience.

There was no Aakash 3 because the next upgrade was called UbiSlate 7C+. “We sold over 1.1 million tablets till date, include 1 lakh Aakash tablets to the (Indian) government," claimed Tuli, whose company has also bid for the Aakash 4 tablets. India’s tablet market is dominated by low-cost devices, with about 74% of the volume coming from the sub-$200 category. Similar is the case with low-cost smartphones, priced below 10,000, the market for which is growing at a rapid pace.

Research firm Convergence Catalyst estimates that smartphones will close 2013 with sales at about 40 million units from 21 million a year ago.

According to a 2 December report by research firm International Data Corp. (IDC), the Indian smartphone market grew by 229% from a year ago in the third quarter of 2013. Vendors shipped a total of 12.8 million smartphones in the same period compared to 3.8 million units a year earlier.

The 5-6.99 inch screen size smartphones (phablets) sustained growth in the third quarter as well; the phablet category contributed 23% of the overall market in terms of volume, said the IDC report. But the competition is tough for any newcomer in the segment. In the third quarter of 2013, Samsung maintained its leadership spot with about 33% market share. Its smartphone shipments grew by close to 36% from the preceding quarter. The third quarter also saw quite a few new launches across price points by Samsung, but it was the low-mid tier phones such as Galaxy S Duos and Galaxy Star that continued to drive volumes, according to IDC.

Micromax held on to its second spot with about 17% in terms of market share, followed by Karbonn close to 11%, and Nokia’s Lumia range of devices garnering close to 5% market share.

Lava, another Indian brand, made it to the top 5 for the first time in the third quarter of 2013, owing to huge shipments of its XOLO and IRIS range of competitively priced devices, said the IDC report.

Analysts said that while the PocketSurfer range of smartphones has good features, appropriate pricing and the right screen size, Datawind would face a challenge when dealing with retail channels and mobile operators to sell these phones offline.

“We will have to wait and watch. DataWind has made a smart move by branding the smartphones as PocketSurfer and not as Aakash," said Vishal Tripathi, principal analyst, Gartner Inc. He added that features are hardly a differentiator in the low-cost smartphone segment. “What matters most are post-sales service, retail and distribution," he said.

“The price point and large 5-inch screen are good features but DataWind will have to get its retail, branding and distribution strategy right, since these are critical issues," said Jayanth Kolla, a partner at telecom consulting firm Convergence Catalyst.