In a country where sub-$100 smartphones are seen as the biggest volume drivers, imagine the frenzy when a $5 smartphone is launched. Priced at Rs 251, the new Freedom 251 by Ringing Bells takes cheap to an all new low. Ringing Bells what? That’s a valid question to ask. You might be forgiven if you’ve never heard of company till this week.
Yesterday, Ringing Bell launched this phenomena at a glitzy event in Nehru Park. I’d say glitzy because it gave me the feeling that I had entered some distant cousin’s wedding. The only people I knew were four or five other cousins (read journos), and there we all were, waiting for the baraat (read Freedom 251 smartphone) to turn up.
One of the reasons the event had a lot of interest, was the fact that Defence Minister Manohar Parrikar was supposed to launch the phone along with BJP leader Murli Manohar Joshi. The event was due to start at 7 pm, and naturally there was heavy security. But once you entered the venue, you could see that it wasn’t just the media that had turned up in a big number; clearly there were others too, men and women dressed in their shaadi best.
A giant stage at one corner. Two screens to the far right and left; while music from Lagaan played at the other end of the venue. Chaat and tikki stalls, and a confused press was the highlight of this event. You can see why I feel the need to drag on with the shaadi metaphor.
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The repetitive message playing on from the stage: This was a smartphone that would help people ‘actualise’ their dreams,’ droning on for what seemed like eternity. Glitzy event in the heart of Central Delhi aside, the targeting of the Ringing Bells smartphone was clear: for those in tier-II and tier-III cities, with very limited cash to spare.
Nearly 90 minutes later, Ringing Bells president Ashok Chadha was forced to take the stage, and inform us that the Defence Minister was running late as, ‘the Parliament was still in session’. We were informed that the Minister would be there in 15 minutes. Fifteen minutes later, the ongoing ‘cabinet meeting’ meant that the Minister was not turning up. BJP leader Murli Manohar Joshi had however reached, and so finally at 9 pm the show began.
As Ashok Chadha took stage, he spoke of many things, how they planned to save on costs by #MakeinIndia, via online marketing, also letting other sellers ‘piggyback’ on their platform. “We are not looking for avaricious profits but sustainable profits,” he said explaining the pricing of Ringing Bells’ Freedom 251.
He also spoke of huge economies of scale for production and at one point, we all asked, ‘Did we hear that right, does he want to make 2 crore smartphones a month eventually.” That’s nearly 20 million a month, a number that requires established factories, skilled labour, not to mention the right components.
But it was clear that the media was going to ask some pretty tough questions. As soon as the phone had been unveiled, the first one came flying out, “Are you getting government subsidies?” After all how is Ringing Bells keeping the price so low for a new-comer to the field.
Chadha tried to calm the press down saying they would answer all questions one by one, once the house was open to questions. Pretty soon, the media gathered at the left side of the stage. Only a few journalists from some publications were allowed to go up. Naturally, television journalists were unhappy, and had started shouting. Chadha then had to come to the side-steps of the stage to do his ‘press conference.’
He denied any government subsidies. “No, I’ve not met the PMO,” he said. He also gave some insight into who or what was funding the business.
“Look, the family behind this is an Agricultural-commodities business family based from Uttar Pradesh. The business family has come together to fund this, and we are relying on debt equity of around Rs 230-250 crores to fund this venture,” explained Chadha. We still don’t know the exact name of the company that has raised this money to fund the Ringing Bells smartphone business.
The confusion, however, persisted, and Chadha really wasn’t winning any brownie points with the press. At one point he said, the phone was for those in rural India, place like Azamgarh, and even asked someone in the media, “Have you been to Azamgarh? I have, we have a strong rural background.” Then when someone asked him for a byte in Hindi, he replied, “Jitni Hindi aati hai, I’ll speak that much,” which immediately raised some shout-outs from the media.
The maths behind why Freedom 251 is priced so low is befuddling at best. Ringing Bells’ President says that if the cost of manufacturing is around Rs 2,500, they are saving some Rs 400-500 odd by relying on Make in India to avoid import duties, then another such amount by sticking with an online model, and then some more by letting others ‘piggyback’ on their online platform to sell other products (presumably Ringing Bells will charge these sellers). Finally some more by investing in large economies of scale.
“We are not talking about 1 lakh units, but much bigger units, and want to capture 30 per cent of this 2 crore per month smartphone market share in India by the end of the year,” said Chadha. That is at least 30 million phones given the numbers in 2015.
The Make in India point makes sense, and Ringing Bells claims that it will have factories in Uttarakhand and Noida to achieve this. But the President of the company accepted that in the initial phase their chipset is still being imported and thus adding to their costs. For now, the phone is far from being 100% made in India, if you go by components. Which brings us back to the question: How is the phone costing less than $5? There’s no clear answer.
Ringing Bells says it will complete all deliveries by June 30, which is four months from now. But there’s no doubt that for some people, this phone means a lot. As I was exiting the event, frustrated from the frenzy (I’ve never felt unsafe at a launch, this one was where I could see strange men staring at me), I stopped by at the media desk, trying in vain to take pictures of one of the devices I had spotted.
A woman had also stopped by and asked the Ringing Bells team, “Bhai phone order kar lu na, aa jaye ga na. Bache kah rahe the, ‘Mummy Rs 251 ke phone ka kya karogi. (Should I order the phone, will it come? My kids were asking what will I do with Rs 251 smartphone).” And that’s really the question: What is this phone really capable of, should it finally get delivered.