What’s the real story behind India’s $4 smartphone?

What’s the real story behind India’s $4 smartphone?

Just days after launching with a huge amount of fan fare, a cutting-edge device with a rock-bottom price is being blasted by industry officials and analysts.
Ringing Bells unveiled its Freedom 251 smartphone on Wednesday. The phone touts features that included a 4-inch display, 1.3-GHz quad-core processor and 8 GB of storage.

The “made-in-India” product was listed for just 251 rupees or about $3.65 each, a price with the potential to revolutionize India’s devices market and make Internet access affordable for tens of millions of people. In a nutshell, it would be life changing for many.
However there is one problem-most say it is too good to be true.
“This seems to be a joke or a scam. It is something we are very upset about,” said Pankaj Mohindroo, national president of the Indian Cellular Association. “This is being investigated by various government authorities.”
In a letter to India’s Minister for Communications and I.T., Mohindroo said that even when using the cheapest components, such a phone would cost at least 2700 rupees ($40) to produce. Additionally, there would be¬†taxes and duties on the phone so the price should be at least 3500 rupees or about $52 U.S.

Most analysts say that based on this information, Ringing Bells will lose $26 on each device sold. There is just not a way to make the phone and have it keep the company viable at the current retail price.
Ringing Bells did not respond to multiple phone calls and emails seeking comment.
There are other warning signs that something might not be so right with the phones too. It was reported by journalists at the Freedom 251 launch event reported that white-out appeared to have been used to cover another brand on the sample phones they were allowed to test. Yes, white out. So were they even testing the phones they were told they were testing?

Another thing that is not sitting quite right is that photos from the event also show that the phone’s home screen icons have been ripped straight from Apple’s iOS, an obvious copyright violation. Apple is not going to like that and that’s a going to mean trouble.

So what’s going on?

Industry analysts say it could be a few things. The Indian government could be subsidizing the smartphone. there could also be a manufacturer that simply could be dumping phones that failed safety tests; or there could be a Chinese company eager to enter the Indian market could be selling phones for cheap.
Ringing Bells has stated publicly that the phones will be made in India with no government subsidies. However, the prototypes passed around at the launch event resembled a model sold by Adcom. Adcom is an Indian company that imports tech products, but does not manufacture them, suggesting that the phones are actually from a foreign market, most likely China.

Ringing Bells said Thursday that it had stopped accepting orders after its website crashed due to intense traffic. The company has promised to deliver the Freedom 251 to customers by the end of June. We will need to wait and see if they deliver.

Share this post