BANGALORE : Like many companies worldwide, Indian mining group Dempo uses handheld computers to help it manage data about its business. But while executives in the United States might use a Hewlett-Packard Co iPaq or a top-of-the-line model from Palm Inc, the device Dempo uses to update its inventories is a home-grown product called the Simputer.

"Earlier, it used to take us more than a week to compile and analyse details of the iron ore picked up by our trucks," said M.R. Aravindan, a strategic planning official at Dempo, which uses 80 Simputers for its operations in the coastal Goa state.

The Simputer looks similar to the better known handhelds, and like them is operated by tapping on its screen with a stylus. It can also connect to the Internet. But the Indian product's target market of rural users such as farmers and village officials could not be more different than the gadget-toting consumers who buy Palms.

The Simputer was conceived by academics as a way of bridging the "digital divide" -- bringing computers to the poor. It was designed by a non-profit trust spearheaded by researchers from the Indian Institute of Science, and the trust licenses manufacturing to independent firms.

ORDERS TRICKLE IN

Two years after a launch marred by marketing and funding concerns, the Simputer is spreading quietly into small towns and schools, as well as to business users such as Dempo. There are plans to put it on retailers' shelves across the country this year.

"The orders are beginning to start coming in," said Vinay Deshpande, chairman of Bangalore-based Encore Software Ltd, one of two companies licensed to make the computer.

The Simputer -- short for simple, inexpensive, multilingual computer -- is intended to help the two-thirds of one billion Indians who live in rural areas.

It is priced between $195 and $375 depending on features, cheaper than a top-end Palm or iPaq. The Simputer also has the advantage that several users, for example a village council, can share a single device by storing their data on interchangeable smart cards.

There is, anyway, little local competition from the U.S. brands. India's handheld market is negligible and even desktop computer sales amount to only about two million units a year, although that market is growing at a clip of about 20 percent.

"Any brand that is developing applications for local use is best placed to exploit the potential in the price-sensitive Indian market," said Ajay Sindhwani, senior analyst at technology research firm IDC India.

LINUX INSIDE

The Simputer runs on the free-to-use Linux operating system software, making it one of the few handhelds not to use Palm's software or a version of Microsoft Corp's Windows. Where it does have more in common with other handhelds is its use of an Intel StrongArm processor and its 32-64 megabytes of memory, although the ability to attach a disk drive to the Simputer for more storage is unusual.

It can connect to the Internet through fixed-line or wireless networks, allowing local governments and voluntary agencies to receive and transmit data such as farm prices. It also has a speech synthesiser that can read English and Indian texts, making computer use possible for the more than one third of Indians who are illiterate.

But sales so far have been paltry. Encore has shipped about 1,200 units, mainly to state governments and consumer firms. Some units have also been shipped to Japan, United States and France, Deshpande said.

He said Encore, which has two contract manufacturers and a Singapore joint venture to market the device, has the capacity to make 500,000 to one million Simputers within 18 months, but sales would be slow this year, at an estimated 25,000 to 30,000. The other Simputer licence holder, PicoPeta Simputers Pvt Ltd, a company formed by a handful of professors-turned-entrepreneurs, said this week it would start selling its own brand of Simputers known as Amida.

"We are actively seeking markets outside India," said Chief Executive Officer Swami Manohar. Encore, meanwhile, is working with more than 50 independent developers on software for applications such as reading electricity meters through bar codes and analysing market data. The use of Linux and India's huge expertise in making software cheaply will keep down the price of applications.

Encore is also talking to hardware firms for marketing tie-ups to put the Simputer on retail shelves across India by October. "We are ready to deploy the device in volumes but our major challenge is aggressive marketing," Deshpande said.

© Reuters