The Indian smartphone industry is abuzz with the announcements of the Freedom 251 handset, which costs Rs. 251 or about $3.65.
The Freedom 251 is produced by an Indian company called Ringing Bells, which is less than a year old and is located in Noida. The company started taking orders for the phone, but its website crashed due to high traffic. Customers had to pay the full amount up front to get the phone delivered in June this year.
Overwhelming demand for the smartphone has led the company to stop taking booking on its website.
"[T]his is to advice that the response far exceeds the number that we had expected and therefore we are now closing the invitation to booking this phase 1," says Ringing Bells.
Mohit Goel, the founder of the company, says that Freedom 251 will be made in India; however, the prototype of the mobile device shown to the media during the launch event had the brand name of Adcom, which was covered with white paint.
According to Ringing Bells, the Freedom 251 has a 4-inch qHD display, Qualcomm Snapdragon processor clocked at 1.3GHz and 1 GB of RAM. It will come running on Android 5.1 Lollipop.
The handset has 8 GB of internal storage and with a microSD card customers can expand the memory to 32 GB. A 1,450 mAh battery fuels the device. The phone also has 3.2-megapixel rear-facing and 0.3-megapixel front-facing cameras.
The Freedom 251 is undoubtedly an entry-level phone, but its specs are good enough for phones that are sold in the market for at least 15 times its price.
At only about $4, the price of Freedom 251 is definitely subsidized. However, the company says that it has not received any government subsidy for the phone.
The company launched the phone but, did not provide any details regarding the economics related to the low cost of the device.
"It looks like it's highly subsidized by the company and it's not clear how they plan to sustain this," said Tarun Pathak an analyst with Counterpoint Technology Research.
Market experts suggest that the cost of the hardware used in the device amounts to about eight times the price of the handset. This excludes production, marketing and distribution cost, which indicates that the company will somehow absorb the cost. Some market analysts have also pointed out that Freedom 251 is a scam.
Low-cost mobile phones may attract many customers, but a $4 smartphone is probably too good to be true.
