Despite earlier reports that the Indian Government was looking for a new manufacturer to produce the world's cheapest tablet, original OEM DataWind appears to be hanging in there. The company will ship a new version of the Aakash tablet next month that ups the specs while maintaining the same price of just over 2,000 rupees, or around $40. Like the commercial version of the Aakash, the Ubislate 7, the new Aakash features a 700MHz Cortex A8 processor and 3300 mAh battery rated for around three hours of use, and replaces the 7-inch resistive touchscreen with a capacitive one. Android Central reports that the tablet will run Froyo (though the commercial Ubislate 7+ is on Gingerbread) and possibly the Google Play Store.

DataWind is pledging to produce 100,000 units, a big improvement on the 10,000 it had managed by last month, but it's still not going to be enough. The Indian government wants a tablet for every student in the next five to six years, which is no mean feat in a country of over 1.2 billion people, and DataWind simply doesn't have the capacity. Still, the company appears to be doing all it can to produce and improve the low-cost device.