The story behind Aakash

WITH THE launch of Aaakash, the world’s cheapest tablet PC, a new era has emerged for the Indian Electronics Manufacturing Services (EMS) and in general the Indian electronics hardware industry. Manufactured at Quad Electronics Solutions Pvt Ltd, an Indian EMS company located in Hyderabad, the launch of Aakash signals the start of a phase of possibilities of high volume electronics manufacturing for Indian markets. It also is a landmark that brightens India’s prospects from the manufacturing sector to electronics, apart from cell phones.

The National Mission on Education with a budget of Rs 4612 crore looks to reach out to higher education and faculty population of around 22 million, thus creating large volume device-manufacturing requirements in India. The collective effort by the government, Datawind and especially the engineers at Quad Electronics has resulted in a piece of technological marvel that Aakash is. This is a prime example of India’s capability to cater to cutting-edge technology at globally competitive prices.

According to a report published by the World Economic Forum, the 13th World Economic Forum in Tel Aviv reported the global electronics industry at $ 1.6 trillion – the largest and fastest growing manufacturing industry. It forecasts a moderately healthy EMS, with CAGR of 11.9 per cent in EMS and 11.4 per cent in the Original Design and Manufacturing (ODM) space. With a production around $1,300 billion, the growth drivers would be the medical, communication and computer sectors

The forum noted the dramatic changes in the outsourcing sector. At $250 billion in 2006, outsourcing grew to more than $425 billion by 2010, with 55 per cent concentration in Asia, 25 per cent in the Americas, 20 per cent in Europe. The numbers in 2011 were a staggering 69 per cent in Asia, 17 percent in the Americas and 14 per cent in Europe by 2011. Also, ODM production is 96 per cent in Asia, 2 per cent in Americas and 2 per cent in Europe, with stabilisation expected at 90 per cent in Asia, 5 per cent in the Americas and 5 per cent in Europe.

The current Indian electronics market is valued at $40 billion. The market is growing at around 25 per cent and would grow up to $400 billion by 2020. The current domestic production is approximately $20 billion – about 50 per cent of the domestic demand. Domestic companies can expand production to $85 billion by 2014 and $320 billion by 2020. This would constitute a significant contribution to the GDP, at 20 per cent by 2020, at par with other economies.

As evident, there is an exponential increase in local and global demand, with a visible shift of mass manufacturing base to Asia. Shrinking time-to-market timelines have forced world players to think different. Also, global Original Equipment Manufacturers (OEMs) today are not risking China, and the Indian government’s realisation of the importance of manufacturing electronics has given India the advantage.