Freedom 251 - cheapest smartphone or a brilliant marketing gimmick?

A smartphone at Rs 251 was a jaw-dropping headline. Touted as the world’s cheapest smartphone, the price point naturally raised eyebrows – and hopes. Excitement was mixed with skepticism; through the day, there were more people asking questions than answering them. As our article went live before the launch, we are back with an update to tell you about the questions buzzing around and some possible answers.

This is not the first time that controversy has surrounded a new company. Two years ago, social networking platform WorldFloat claimed to have 6 million users and valued at $300 million. It was nothing but a static page. Freedom 251 clocked 30,000 orders before the website crashed owing to the massive traffic it received. The server couldn't take the curiosity of audience and collapsed against the flood of 6 lakh hits per second! With a shipping charge of Rs 40, one unit of Freedom 251 cost Rs 291, so the company collected Rs 8,730,000 before the crash.

Freedom 251 has been trending on social media for the last two days and has also sounded the alarm to a potential scam. Here are a few facts that have emerged in the past few hours.

1. A blatant rip-off of Apple: The icons, the home screen. The entire UI appears to be a rip-off of Apple’s iPhone. When asked about this, Ringing Bells’ technical head Vikas Sharma admitted they had used Apple’s icons, saying, “We have used Apple's icons because Apple hasn't copyrighted their designs.” It would appear that nobody at Ringing Bells read the news. The folks over at Apple probably do.

Also read: Why should startups care about the Budget

2. Website: There are no contact details given on the website. There’s a contact form instead. The site has most of the details hardcoded which can, at best, be called amateurish. A simple whois query reveals that the domain was registered on 10 February 2016 and was updated on 14 February 2016: less than 10 days back.

3. Reselling without permission: The product came with Adcom branding, which was hidden by a whitener and overwritten with “Freedom 251”. And Adcom is denying that fact that it is selling or even manufacturing the phone for Ringing Bells.

4. Delivery Date: The delivery date was a good four months away (as mentioned on a website with no contact details). Another red flag seems to be the fact that Ringing Bells could have partnered with an online sales partner like Flipkart, Snapdeal or Amazon for pre-ordering the phone; all these sites have better scale for handling huge traffic that accompany pre-ordering. Another option was to put it up on crowdfunding sites like Indiegogo, Ketto or Wishberry to raise money to develop the product. They chose to go with their own not-so-shiny new website.

5. No personal money at stake: When asked at the press conference held to announce the release of Freedom 251, if the promoters of Ringing Bells had personally invested in the company, they stated that the entire capital comprised equity and debt investment. The promoters, it seems, have very little to lose in financial terms.

Related read: How Xiaomi sells its high-end phones at low prices: a short lesson in the Economics of Pricing

6. Cost: Current technology does not allow for a mobile phone to be manufactured at this cost. The bare minimum is around INR 3,800, even if it is subsidised. The company has made it clear that they have not received any subsidy, either from the government or any other third party for this project. The ‘magic formula’ remains a secret.

7. 650+ Service Centres: Though the site claims to have over 650 service centres, there is no mention of even a single service centre, and nobody knows which cities they exist in, let alone their actual addresses.

8. You can buy even half of Freedom 251: The company's website allowed users to order 0.5 quantity of the phone for Rs 125. Frustrated user took the case on twitter and shared the screenshot of booking.

9. More ‘promises’ in the making: While cyberspace is already aware that bookings closed this morning and social media has been abuzz about people’s inability to book the phone on the Ringing Bells website, cyber cafe owners are apparently taking money from people and giving them a receipt for booking the phone on their behalf, as suggested by Twitter user Yatin Chawla in this tweet.

[last updated at 13:00 hrs]

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