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DataWind’s smart phone deal is a key milestone, says Haywood

DataWind

DataWind DataWind’s (DataWind Stock Quote, Chart, News: TSX:DW) deal to bundle internet browsing on three new smart phone models is a key milestone for the company that should allow it better and faster penetration of the Indian market, says Haywood analyst Massimo Voci.

This morning, DataWind announced it will partner with carrier Reliance Communications to offer unlimited browsing on three new Android Kit-Kat powered smart phone models.

“This is a very exciting development for India; we are making the Internet more easily accessible to millions of people across the country, like never before,” said CEO Suneet Singh Tuli. “In working with one of the largest telecommunications providers in the country, that has more than 115 million customers, we can bundle reliable nationwide Internet service with virtually every device we ship through all of our Indian sales channels. By broadening our Internet service coverage, we can add more subscribers to our already fast-growing customer base and, in turn, increase our recurring revenue stream. We are confident we now have all of the key building blocks in place — the product range, inventory, distribution network and now India-wide Internet service coverage — to drive accelerated growth.”

Voci cites an IDC report that says smartphone penetration dwarfs that of tablets in India. He thinks these low cost devices will set DataWind up for greater penetration of data subscribers, which is a much higher margin business than hardware.

HIRE Technologies

“We believe that as mobile users in India continue to migrate towards more feature rich smartphones, DataWind will be uniquely positioned to compete at the lower end of the market due to its unique Internet Delivery Platform, low-cost hardware, and overall attractive cost of ownership,” said Voci.

In a research update to clients this morning, Voci maintained his “Buy” rating and one year target of $7.00 on DataWind, implying a return of 274% at the time of publication.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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