Freedom 251 – Is It Really Possible To Offer a SmartPhone in Just Rs. 251?

A much shouted new entrant in the Indian mobile handset market Ringing Bells has revealed what is being called as the world’s cheapest smartphone FREEDOM251– for Rs 251 — but has also raised concerns in the industry on feasibility of offering a smart phone in such a low price.

Let us first focus on the features of this FREEDOM251:

  • 4″ (10.2 cms) Screen qHD IPS
  • 1.3 GHz Quadcore Processor
  • 3.2 MP AF Rear & 3 MP Front Camera
  • 1450 mAh Battery
  • 1 GB RAM
  • 8 GB Internal Memory, Expandable upto 32 GB.
  • It will come with pre-installed apps linked to government initiatives like Swachh Bharat, Fisherman, Women Safety, Farmer and Medical.

Sunit Singh Tuli, the CEO of Datawind that produced the USD 35 Akash tablet for government a few years back, said a 3G device with the specs offered would cost almost eight times higher than what’s being offered.

The mobile handset industry has also raised queries and concerns about the feasibility of pricing of the device and has asked Telecom Minister Ravi Shankar Prasad to digg into depth of the issue, saying the price could not be below Rs 3,500 even after a subsidized sale.

Indian Cellular Association (ICA) also expres their concern on the presence of Senior Government personnel in the inaugural event of the smartphone launch.

For your kind information, the bill of material value for a product like this when sourced from the cheapest supply chain cost approx USD 40 (Rs 2,700). And this when translated into retail price after addition of applicable duties, taxes and with distribution and retail margins would be at least Rs 4,100 while the product is being sold at Rs 251,” ICA National President Pankaj Mohindroo said in the letter.

He added even if the product is sold at lower margins in a e-commerce type subsidized sale, the final consumer price cannot come below USD 52-55 (about Rs 3,500-3,800).

Also, with no visible mobile operator subsidy involved in this, the price does look difficult to offer.

Ashok Chaddha, President of Ringing Bells‘, the company behind the Rs 251 Smartphone said manufacturing cost of the phone is about Rs 2,500, which will be recovered through a series of measures like economies of scale, innovative marketing, reduction in duties and creating an e-commerce marketplace.

By going for Made in India components, we can save on the 13.8 per cent duty. Also, we will be selling online first and thus save the costs incurred on large distribution network,” he said.

Chaddha also nullified the news of Government subsidies for this handset. “The phone will be manufactured in Noida and Uttaranchal. Two plants will be set up for Rs 250 crore each with a capacity of 5 lakh phones. The money will come in the form of debt and equity (1.5:1),” he said.

Lets hope the Smartphone rises as a star and connects every citizens of India.

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Nirmalya Ghosh

Nirmalya has done his post graduate in business administration and now working as digital marketing executive in a US based firm. He loves to share the trending news and incidents with his readers. Follow him in Facebook or Twitter.

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