Freedom 251, the cheapest smartphone in the world, will launch on July 7 followed by first set of shipments going out a day later. Despite all the scepticism, and ridiculousness of the pricing, Ringing Bells, a little known company in the Delhi suburb of Noida, is confident of being able to deliver the phones.
While the company will make losses running into crores on this certain device, there might be shrewd business sense behind the Rs 251 smartphone. Clues to this strategy can be seen in the invite which the company has sent out for media launch. It says the company will also launch televisions and smartphones — in fact the former is more prominent in the invite than the latter.
It is certainly not a Freedom 251 event as you would imagine given that this phone, if true, could change the entire industry across the world — if you haven’t realised most components of the cheapest smartphones cost more than this phone.
Ringing Bells seems to be using this phone to create the buzz and recollection around its brand. While most of the Chinese players who came into India recently are burning millions of dollars to capture mindspace, Freedom 251 made Ringing Bells a household name and topic of tea shop discussions around the country with just a press note. If you remember those old credit card ads, this is what you should be calling ‘Priceless’.
While the company has orders running into millions, its new lucky draw format means it can get away by fulfilling a few thousand, or maybe a few hundred, orders. By most estimates this phone should cost Rs 2400 at least.
Let’s say the company is incurring a loss of Rs 2000 per unit and delivers ten thousand units at a burn rate of Rs 2 crore, the brand value it has created could be worth much more. If volumes are ever questioned, the company can blame lack of a local ecosystem and sourcing opportunities to explain why it has not been able to stick to the price points.
But when it brings in its range of reasonable priced smartphones and feature phones in along with cheap television sets, it will ring in Indian minds as an affordable brand. What it won’t have is credibility, but then that is something many brands are willing to overlook. Does this ring any bells now?
While Freedom 251 might not be the smartphone saviour the world has been waiting for, it has certainly given the parent company the brand value very few devices — real or fake — ever can.
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