DataWind has served a legal notice to Quad, alleging that the company offered to make a tablet directly for IIT Rajasthan, infringing DataWind's intellectual property, Tuli said. Quad said it had tied with IIT Rajasthan to design and make converged devices, but not a tablet like DataWind's product.
DataWind's nongovernment sales to more than 3 million consumers who had preordered the device without payment since December have also not taken off, partly because of the dispute with Quad, Tuli said. The company had to quickly sign up a new contract manufacturer.
Some of these customers have paid to get expedited delivery, and after a six-week delay DataWind plans to launch the project on April 26, when it will announce new configurations, order volumes and shipment schedules.
The company has meanwhile updated the device to the second-generation Aakash 2, which will have a 7-inch capacitive multitouch screen and a single-core, 800MHz ARM Cortex-A8 processor, faster than the earlier 366MHz processor. The device will ship to consumers at rupees 3000 ($57) and will include Wi-Fi and GPRS.
The same device will also be sold at rupees 2276 ($43) to the Indian government under the original 100,000-unit contract. The deal is now to be managed from the government side by another educational institution, IIT Mumbai, but it could take until May for the process to resume, and much later for new orders to come, Tuli said.
The two educational institutions could not be immediately reached for comment.
DataWind still hopes to make money by selling the device to the government at the $43 price, as component prices have since fallen. The Indian government will subsidize the price of the device further to $35 before offering it to students.
John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com
