Freedom 251: How is the phone priced at Rs 251

The company expects a duty waiver by the upcoming goods and services tax waiver, through Make in India, reports Tech in Asia

Ringing Bells has launched Freedom251, the cheapest smartphone in the world. This little known Noida-based startup will be a game changer in the smartphone industry if their phone works well.

Wonder how the company has managed to price their phone so low?

The company says that a normal-priced phone with these specs typically falls in the range of $36 to $43. But with state governments waiving off duties (which it is expecting), it thinks it can lower that cost by 20-30%.

It is also expecting a nearly 35% cost reduction by selling only on the internet through its own channel – just like the flopped Aakash tablet did.

Finally, the company expects a duty waiver of 13.8% by the upcoming goods and services tax waiver, through Make in India and startup schemes. The rest of the cost reduction will be achieved through ‘economies of scale,’ according to the company.

Still, cutting corners now based on future cost reductions can be difficult. Datawind, the manufacturer of the aforementioned $35 tablet, took between six months and a year to ship products to customers – after it finally managed to raise cash from various sources. It also faced lawsuits in Indian courts as a result of the delays.

Ringing Bells is raising funds from banks through a combination of loans and equity to set up the plants and assemble the units.

In addition to the $4 phone, the company is also looking to launch a higher-spec model at a higher price. The brand Ringing Bells builds through this $4 marketing gimmick will help to sell the higher priced models, the company says. 

This is an excerpt from Tech in Asia. You can read the full article here