After Ringing Bells announced that the Freedom 251 smartphone would be sold for just Rs 251, the entire country and the smartphone industry were taken by surprise. Well, everyone is still thinking about how the company can actually make, sell and gain profits from a smartphone that will be sold for under $4.
Soon after the Freedom 251 online sales went live, millions of people hit the website for an order, only to know that the Freedom 251 website had already crashed with excessive hits on the servers. Minutes after opening the website for registrations the servers saw a huge traffic, and the company announced that the smartphone sales would resume after 24 hours. The company claimed that they already had more than 6 lakh registrations and while many managed to make payments online, others just could not see the payment page at all. The company has now stopped the online bookings stating that the bookings exceeded the expectations, and they would not be able to deliver the amount of smartphones that were ordered in first phase.
However, the mobile industry did not keep silent. They too were shocked at the way this smartphone sale was blown out of proportion. With claims that the company is pulling a fast one on the industry and is making money on the poor, ignorant customer, the matter considered the company to be a fly-by-night manufacturer.
Many media reports were announcing that the company had absolutely no proof of the factory that will manufacture the device. The Freedom 251 smartphones that were shown off and handed over to the media for reviews were also shown in low light. The smartphone that was shown off at the launch was not a Freedom 251, but an Adcom smartphone that retails on Snapdeal for approximately Rs 4,000, and the Adcom branding was cleverly hidden behind a whitener. In defence, Ringing Bells soon announced that the smartphone shown at the launch and distributed to the media was a sample and prototype. The actual device would be different.
Ringing Bells announced that the Freedom 251 smartphone would be a full-fledged 3G smartphone with a 4-inch LCD display, a 1.3GHz quad-core processor with 1GB or RAM, 8GB internal storage (expandable to 32GB) and a 1450mAh battery. The device will also sport a 3.2MP rear camera along with a VGA front camera. The device will sport Android Lollipop as the operating system and will offer a bouquet of pre-installed apps for the masses. The device is sold for Rs 251 + Rs 40 (Shipping charges) and will expect to see deliveries starting from June 2016.
The company has announced that this smartphone is basically aimed towards the ‘aam aadmi’ who are particularly at the extremely low end of the pyramid. Those who cannot afford regular smartphones will be able to now latch on to the internet and be connected. The aim was to have every individual in the country connected via a smartphone and the internet. Ringing Bells also made an announcement via certain media interviews that eve after selling the smartphones for mere Rs 251, they will still see a profit of Rs 31 per handset. The main profits will not come from the device itself as the manufacturing cost of the same is more than Rs 2,500 per handset. The source of income is via ‘economies of scale’ and making more income from their website by using it as a platform for selling other devices from other companies.
However, the smartphone industry and the media are not happy with the answers. While some say that ‘The idea here is to present a scheme for masses, get instant fame, rub shoulders with influential people, acquire free land, and disappear,’ others say that, ‘with some lobbying, Ringing Bells will get cheap/free land to setup a manufacturing/assembling plants’.
Well, the company was established in the second half of 2015 and claims that they are the fastest growing smartphone company. But how can it be when they haven’t managed to sell or deliver even one smartphone till date?
Soon after the industry showed their concerns of this ‘fake’ and ‘scam’ business running under the nose of the BJP government, letters were shot off to the official departments. Top known politicians blasted off stating that the Freedom 251 is nothing but a fraud, a scam. The IT department also conducted a raid on the Ringing Bells offices in North India. The IT department has also warned Ringing Bells that they will face action if the smartphones are not delivered as promised.
From Congress MP Pramod Tiwari to BJP MP Kirit Somaya raising concerns and asking for the company’s scam to be thoroughly probed, the entire industry is shocked on how this scam was so easily executed, that too in broad daylight. The centre has, however, washed its hands off from the controversy stating that it is not a government backed, subsidised or a Make in India initiative.
Moving further, the internet was filled with humor and rage from netizens posting their feelings on the social platform with memes and alike. There was also a parody website born immediately after the scam was in limelight where a Freedom 651 smartphone was announced.
However, after facing a lot of heat from the government, mobile industry and the netizens, Ringing Bells announced that the Freedom 251 would see light of day and will now offer cash on delivery. Their Facebook page announced that they would accept cash on delivery of the said handset as against using a payment gateway and will issue the first 25 lakh handset registrations initially.
Ringing Bells has chosen the ‘cash on delivery’ mode in order to ensure further transparency and clear any misgivings. The company will ‘hand out’ the first batch of 25 lakh smartphones from June 30, 2016.
What more is expected? Will the company roll out their smartphones in time? Will they manage to sell the smartphones at the amount stated and make sufficient profits too? End of June will announce the fate of Ringing Bells.
UPDATE: Ringing Bells MD Mohit Goel has announced that the company will refund the amount of those who have paid online and will accept cash on delivery only....