Okay, so today it’s 17th Feb 2016, when almost everyone is suddenly talking about this less than 500 Rs. android smart phone called Freedom 251, precisely a 251 Rs. smartphone.
I was scanning through the newspaper when I could not ignore the 2 big full page ads of 251 Rs mobile phone. At first it seemed like a govt initiative (not sure if it was intentional), but because it caught my attention, I looked further… Ringing Bells Pvt Ltd was the company behind it.
When I went out my friends were talking about it. Switched on the TV, it was there too. It’s all too good to be true. It’s natural to be too excited about this unbelievable offer, but let’s try to analyse some facts which I have discovered so far…
Specification of the smartphone as advertised…
Let’s examine some of the facts….
1. Cost of goods required to produce such a smartphone is at least 2500 rupees , leave alone the cost of marketing and profit margin.
2. Photograph of the phone shown on the websites and the video review on various websites are different… Check this video …
Freedom 215 android smartphone photo difference:
3. This is not even clear whether the phone has been made or not. It was also observed that the phone displayed carried Adcom branding, which was omitted. Adcom has a similar phone at a price tag of 5000 rupees.
4. The company behind freedom251, Ringing Bells Pvt Ltd was started almost 5 months back on 16th Sep 2015, as per the Ministry of Corporate Affairs Database with CIN (U32204DL2015PTC285276). This means company has no track record.
5. The company has merely 6 employees, wheres they claim to have more than 300 direct and 2000 indirect employees. Company profile on a job portal careesma.in indicates employee count of 20… that is still far from 300.
6. Company’s website does not have any information about the manufacturing facility.
7. There is an interesting complaint filed against the company that refers ringing bells as the “Lalla ki dukan can be found here… click here to read full.
Freedom 251 complaint:
8. Company boasts of 650 service centres pan India, yet no information about that on their website.
9. There is no venture funding behind the company which raises questions on the company’s claim of producing at a very large scale (more than 100 thousand devices every month ).
10. At the launch event on Wednesday, Ringing Bells President Ashok Chadha claimed it was being funded by the Agricultural family of UP( referring to Mohit Goel’s family), whereas Mohit’s father denied that to be the case.
11. Company says they plan on allowing other sellers to sell via their eCommerce platform, which does not exist right now.
12. Govt has not offered any subsidy on their phone.
13. Make in India tag also seems to be fake because Mr. Chadha himself claimed the parts will be imported from China.
14. Phone’s will start shipping from June 2016
15. No mention of any return policy although they mention 1 years warranty
Coming back to the very important question once again, how come they can offer at such a low cost and still make money?
According to statistics given by some industry experts…
a. Effective selling price of freedom 251 is rupees 291 per phone including shipping of rupees 40.
b. If their claim of 600,000 order per second is to be believed, it sums up to rupees 17.46 cr.
c. It was taking order till 12.15pm approx I.e 6 hrs and 15 min which is 22,500 seconds. That means, rupees 17.46 cr per sec x 22,500 sec = rupees 3,92,850 cr.
d. Rupees 3,88,494 cr was turnover of reliance industries in year 2014-15
Does that mean within 6 hours and 15 minutes they crossed turnover of reliance?
e. And if we calculate interest on the said amount per day, 3,92,850 cr x 4% x 1/365 (by taking minimum interest rate) = 43.05 cr.
f. And if after 4 months they will say we are unable to give product and refund rupees 291 to everyone 43.05 cr x 120 days approx = 5,166 cr. They will earn within 4 months by way of interest
Now even if you consider their promotion and marketing costs, deduct rupees 50 lacs, 1 cr, 5 cr or even 50 crores, that will not make much difference to the figure.
If you’re considering ordering this super cheap android smartphone, order it at the risk of loosing 291 rupees, as it may not make much difference to your pocket, probably you will just need to skip a movie on the weekend to compensate the loss 😉
About Deepak Chauhan
Hi, I am Deepak Chauhan, a Digital Marketing Strategist. I'm the CEO & Co-Founder of VOCSO Digital Agency, a creative web design, development, and marketing agency based in India & USA.