Freedom 251: Why the phone and its low price may not ring a bell for everyone in country

Ringing Bells Freedom 251 could be the real democratisation of the smartphone. At this price, there should be no one in India who doesn’t own a smartphone and everyone should be online within a couple of years.

Nandagopal Rajan

Ringing Bells Freedom 251 could be the real democratisation of the smartphone. At this price, there should be no one in India who doesn’t own a smartphone and everyone should be online within a couple of years. That is the kind of effect a Rs 251 smartphone will have on the market, not to speak about the dozens of smartphone companies that will go out of business.

But things are not that simple. If there was a possibility to manufacture and sell a phone at under $5, the Chinese ODMs would have done that already. Why would a large domestic player like Micromax have left that door open for a small Noida company to exploit first.

Indian Cellular Association president Pankaj Mohindroo said “this pricing is not possible under any circumstances, even if the components are made in India.” He said the bill of material of a product like this is around $40. While the association expects there to be a “marginal effect on market sentiment” as “consumers may hold back purchases”, “this will have no impact on a profound campaign like Make in India”.

The first set of reviewers who have got the phone, have been posting on how it is actually an Adcom Ikon 4, incidentally priced at R4,100 on Flipkart and other ecommerce sites. In fact, the Freedom 251 carries a Tricolour sticker on the rear panel to conceal the Adcom branding.

“A 3G device with the specs offered has a base manufacturing cost almost 8X higher than what’s being offered. So, we’re interested in learning of how they’ve achieved this, including all the licensing fees etc. We hope this is not a small marketing promotion, and is broadly available to the 100 crore Indians that need such affordable technology,” says Sunit Singh Tuli, whose Datawind was the original affordable smart devices company of India, having shocked the world by offering a $35 Aakash tablet for the Indian government. The company continues to produce affordable smartphones and tablets, but Tuli’s cheapest smartphones is a 2G device priced Rs 1,999. His 3G device, with specs similar to the Ringing Bells Freedom 251, costs R2,999. The cheapest smartphone we could find online in India was a Trio Trio Smart Touch Phone Junior 3, priced R1,449 with considerably lower specs than the Freedom 251.

This is why even Tuli agrees that the phone, at least on paper, is revolutionary. “If they deliver their promise on quality, this will act as a challenge to the entire handset market. However, if it turns out to be short quantity promotion, it will also set a negative example for the industry.” Incidentally, Datawind is already working on Rs 1,500 and Rs 999 smartphones which it expects to launch in the next quarter.

“We welcome anybody interested in breaking the price barriers, and hope that while following in our footsteps, they would see even greater success than we have seen,” says Tuli, explaining how Datawind “helped the tablet market grow 20x from 2.5L units to 50L unit in the last four years by breaking the affordability barrier”. He claims to have sold over 25 lakh units in the market so far.

However, all this pales in front of the kind of numbers Ringing Bells is flaunting. The company wants to have an installed capacity of 5 lakh units a month and given the kind of interest a Rs 251 smartphone will generate, this will only fall short. Also, the company wants to use Indian components to reduce the cost and avoid duties. But if there are Indian companies manufacturing smartphone components, then it is strange why other OEMs have not been able to find it.

Sanchit Vir Gogia, CEO & Founder at Greyhound Knowledge Group, says the phone is very interesting. “Lowest we have seen till now was $28 (about Rs 1,700), but this a new low. But then, this is highly subsidised to start with and whether or not these stay is a huge question.” Gogia says it while the phone can be compared to a feature phone, it may not do justice to users expected experience. “While smartphone is a factor of price, the other major factor is better touch experience and apps,” he explains.

Gogia says it will be difficult to sustain the price in the long term. Also, the fact that the company founders don’t have experience in this field might also prove detrimental to its prospects. He is also not willing to take the company’s claim that there is no government subsidy on the phone. “The phone is loaded with Make in India apps. Clearly, there seems to be some arrangement,” he said, adding that even if they source components locally, these won’t come cheap.

Also, the phone has to be booked online, a feature that might prove a stumbling block for lots of people who might actually benefit from the devices. The company has suggested an offline model later, but that will not be before June 30. By then we should have a clear idea about what this is all about.