Datawind, a UK based company, are supplying the first 100,000 devices to the government of India at $50 each[1] but in high enough volume, the company believes they can sell them to Indian government for just $35.

The Aakash is built on a three pronged strategy to achieve such radically low cost: data compression technology that shifts the burden from the device to servers, therefore allowing for lower priced processors; a monetised, app based, operating system and most importantly high levels of vertical integration in Datawind that keep manufacturing costs low.

[1] http://www.washingtonpost.com/business/datawind-ceo-says-35-tablet-computer-available-in-india/2011/10/07/gIQASWwOSL_video.html