What's the catch behind freedom? 251
Freedom 251: Why It's a $ 3.7 Android Smartphone and Why It Shouldn't Exist
While everyone is preparing for the Mobile World Congress 2016 and thinking about holding a certain Samsung or LG in their hands, a small Indian company is making waves with the introduction of its super affordable smartphone, the Freedom 251.
The Freedom 251 is manufactured by Ringing Bells Pvt., Based in Noida, India. Ltd. developed. In terms of features, the device has a 4-inch qHD IPS display with a resolution of 960 x 540. On the inside there is a MediaTek 1.3 GHz quad-core MT6582 processor. There's also a commendable 1GB of RAM and 8GB of internal storage with microSD expandability of up to 32GB. There's also a 3.2-megapixel auto-focus rear camera, VGA front camera, 1450 mAh battery, and Dual SIM 3G support so you don't get a stupid phone either. The phone runs on Android 5.1 Lollipop and comes with a number of preinstalled apps.
What is the selling point for this device? Why give exactly we are looking at the specs of a device that sounds like a 2010 flagship at best? The main argument for this device is the super affordable price. The device costs INR 251, which is at the current exchange rates 3.67 USD corresponds to.
No, you didn't read it wrong, and we didn't make any mistakes. In fact, the device costs the end user less than $ 4. Only four dollars!
For $ 4, overlook all of the device's specs and buy it outright. You don't even have to use the device - buy it first and think about how to use it later. If you drop the $ 4 device and break it, it's much easier to buy another than to spend money and gas on driving to the service center. Leave it alone for it to be fixed. For $ 4 ... well, you get the drift.
Should you or someone really buy this device? Before we answer that question, let's get a little sneak peek into the device and its crazy and unconventional price tag.
The parent company Ringing Bells Pvt. Ltd., is also a fairly unknown quantity in the Indian smartphone scenario. As an Indian consumer who frequently comes across unfamiliar smartphones (popularly known as "China Phones," which are used as an umbrella term for brands that you will never find a second phone from), Ringing Bells doesn’t ring any bells (sorry) . Livemint.com has found that little is known about the company and that Sushma Devi, Rajesh Kumar and Mohit Kumar Goel are listed as managing directors in public records. Mohit Kumar Goel has a few degrees and comes from a family primarily engaged in agricultural products who only ventured into telecommunications in September 2015. As quoted by Livemint, this shift from agriculture to technology has been driven by the extensive government work modes inspired obvious commitment to "Sabka Saath, Sabka Vikas" (roughly translated "Development for everyone" ).
How do you create a smartphone that costs less than the microSD card that the customer will eventually buy for it? How do you create a product that is so complex and yet has a lower selling price than the monthly fee the customer pays for 3G internet?
There are a few possible theories about the price of freedom 251
One theory is that the phone could be heavily subsidized by the Indian government. This seems like one of the most plausible theories considering that there were political heavyweights in attendance at the opening ceremony of a phone for a nameless corporation. There is certainly a huge incentive for the government to subsidize such a device: a phone at this crazy price will be for a very large population (and thus for the voter bench ) affordable in India. Except for the poorest of the poor and those without basic services, most low-income groups have a “dumb phone” in the family. The cost of this device is competitive even when compared to "dumb" phones. A phone that can do a lot more at a lower price is therefore a logical upgrade for anyone looking for a device like this. Considering other initiatives by the Indian government, such as partnering with Google to install high-speed WiFi at train stations and the Digital India movement, a subsidized phone for the masses fits right into this missing piece of the elaborate puzzle. It's just too perfect for a scenario to rule out!
Another theory is that the phone could be subsidized by a network operator, much like a contract system. After all, it is a widespread practice in the US and elsewhere for phones to be sold at a fraction of their unlocked price on the condition that the customer must pay off the phone in addition to their phone bill over a set period of time. However, the current carrier scenario in India has a very low percentage of contracts when it comes to individuals. Most consumers, especially in this special target group of cheap devices, prefer a prepaid connection. Contracts are virtually unknown in this price segment, so a carrier would certainly have to have the vision of taking such a large risk with such a low profit margin per customer, if at all. Remember that people who buy this device are still earning daily wages. Hence, they are unlikely to pay to get unlimited 3G data if their other, more basic needs are not met.
Another theory based on the aluminum foil hat, which we skeptical about, is that if you receive products for free, you are the product. Freedom 251 may not really represent freedom and could be a way of collecting data on the absolute mass of the Indian population. The rural areas are large, untapped markets for targeted advertising. It is therefore a very lucrative undertaking to determine the preferences, the location and other personal habits of the users (all "consensually" of course).
Perhaps the final theory, and the one that seems too insane, is that the company actually managed to cut the cost of the device significantly, undercutting even the Chinese. They have managed to reach such a production scale that they can produce entire smartphones for the retail price of USB cables. There are cheap Android devices that are getting cheaper every year. But even with the cheapest of all hardware today, a smartphone will cost $ 20 just because of its manufacturing cost. There's also the cost of design and development, sales and marketing, advertising (after all, those front-page ads cost a lot of money), and even customer service [ringing bells grants a standard year Warranty in over 650 customer service centers in India]. With all of this in mind, it's next to impossible to get a smart smartphone on the market for less than $ 4. In this respect, this theory is the least valued in terms of plausibility.
Proper advertising: Advertisements all over the home page in various leading daily newspapers for the $ 3.7 smartphone
So what exactly is happening?
So far, no telecommunications providers have come forward to announce their partnership with Ringing Bells. A carrier-based subsidy is therefore not in sight.
State funding from the company was excluded at the kick-off event. According to reports from NDTV Gadgets present at the launch event, Ringing Bells President Ashok Chadha confirmed that there is "no government subsidy" for Freedom 251, aside from a longstanding friendship with MP Murli Manohar Joshi, the "Vision." and instructions "provided. for the project. Since there is no evidence of a proper subsidy, we have to trust the company's word in this regard, unless otherwise proven. However, government advice / sponsorship is a kind of subsidy in itself.
So what's left? The company claims it will get through that price "Economies of scale" as well as through the use of the product ecosystem. President Ashok Chadha has mentioned that the cost of making one unit of the smartphone starts at INR 2,000 ( $ 30 ) lie. This is believable given one of the closest phones we could find that is similar to the original product, the Adcom Ikon 4. stands for INR 3,599 ( $ 52.5 ) for sale. The Freedom 251 is almost an Adcom Ikon 4 with a new name, although some technical changes such as a downgraded camera setup and a different screen resolution have been made. To quote Ashok Chadha:
“By producing in India, that price drops by 400 rupees. Then we only sell online. So this lowers the price by another 400 rupees. We are sure that this smartphone will be in great demand. We expect these economies of scale to save us around 500 rupees. We are finally waiting for our platform to grow so that we can make money from other services. "
If you do the math on the numbers the company's president gave us (which feel overrated, but let's just join in), the cost of the device drops to INR 300 ($ 4.4), which is still higher than that Selling price. The company charges a nominal price of INR 40 ($ 0.6) for shipments. Assuming the company sells all of the smartphones it makes, the project is still at a loss and growing with every sale of the device, without taking into account after-sales services. The company is really betting that Freedom 251 will be popular with the project actually making money . Like many large corporations, Ringing Bells strives for the thinnest piece of the biggest cake.
Note that the numbers given by Ashok Chadha are still controversial as the base price he started at usually takes into account any economies of scale - that's why it was so cheap to start with. Economies of scale are not based solely on dividing the fixed costs by the number of units produced (variable costs). Above a certain production threshold, you need additional machines and infrastructures (rising fixed costs) in order to produce more units (and thus reduce them to the same level). Companies are reaching these limits and in order to lower these prices even further through small margins, many more compromises have to be made. To do so is just wishful thinking and a remarkable feat when accomplished. Even so, the company is confident that it can.
In order to break even, the company will make its platform available to third parties in exchange for revenue. This model is not entirely unknown either. Several big names like Amazon and Google offer a variety of free or cheap services and even hardware to create an ecosystem that is profitable to outsiders. No mention was made of how exactly Ringing Bells plans to "To earn money with other services" . So we can only hope that they have ethical approaches to this services follow.
Now that we've explained everything there is to freedom, everything is fine, right? Should we all jump on freedom and know that everything is clear from now on?
Not really. There is still a lot of controversy surrounding the device.
Initially, the product that was listed on the website for the Freedom 251 wasn't the real product until recently. An archive from the official website in the early hours of February 17, 2016 shows a product with three capacitive buttons that caused a lot of confusion at startup and afterwards because the device did not match the pictures. The device follows a more iPhone-like front, so the confusion was legitimately based.
- 17th February 2016
- February 18, 2016
The product that the media received at the event not only looked different from what many expected, it also appeared as a rebranded device rather than one made by Ringing Bells itself. Even if rebranding is not a new strategy, in this case it is very confusing and questionable as the product is already considered a success of the campaign by Make in India was touted. If the bells didn't ring, who did?
Adcom did it. At least the “beta prototype” that the company presented at the “introductory event” was an Adcom product. Adcom is a New Delhi based importer of IT products. The most suitable product is the Adcom Ikon 4, which is available in the Indian market for INR 3,599 (USD 53). When the Hindustan Times team contacted Adcom, the marketing director denied any knowledge of using an Adcom device!
Of course, Ringing Bells could deny that it was an Adcom product. But unfortunately they overlooked one important factor ... the device that was shown to the media had the Adcom logo on the front overlaid in white ink . No, we don't make that up. It actually happened! One product dubbed "Made in India" by a company that claims to have had economies of scale of $ 4 had an imported product (in all likelihood) that was renamed with the ingenious use of white ink . Here are the revealed images of the device:
The Freedom 251 is also on the verge of a copyright lawsuit as it is very clearly copying many symbols from the iPhone. Even the browser icon is that of Safari.
The front layout of the hardware is also similar to the iPhone with the round home button. India's laws and their consistent implementation of copyright law are not as strict as those in industrialized countries. But with the Freedom 251 gaining huge market share in rural areas, we can be sure that Apple will want a bite of it, too.
Oh, and if you can live with all of that, NDTV found that the Freedom 251 isn't certified as safe for use in India by the Bureau of Indian Standards (BIS) either. This means that, among other things, the phone does not offer a minimum guarantee of quality and safety against overheating and the risk of fire. Obtaining BIS certification is a costly and time consuming proposition, so skipping the Freedom 251 is not good for the safety of the product but is in line with the top of the line business model. Note that no other Ringing Bells Pvt. Ltd. or even Adcom appear on the BIS page, but other well-known and popular manufacturers do. This is certainly serious business if the device is to get into the hands of thousands of people in the country.
The Freedom 251 is the people's phone . It is a glimmer of hope for the common rural dweller to give them the opportunity to access the wealth of knowledge and resources available on the internet. But there is only one final catch with Freedom 251: The poor cannot buy the poor man's phone.
The Freedom 251 went up for sale on its official website in the early morning of February 18, 2016. To buy the phone you had to go online at 6am and put it in the shopping cart and then make payments through the payment gateway which failed and failed for many users.The payment gateway reportedly also had payment options limited to credit and debit cards, but we couldn't confirm this. Due to the unforeseen demand that was 600,000 hits per second, the website eventually fell for a while. As a result, the company's director mentioned in an interview that despite the overwhelming demand, only 30,000 units of the device were actually sold. Sales of the device are expected to resume on the website within a day. The company has also promised to ship all phones sold in the first batch within four months by June 30th.
Wait, how does the poor man buy the phone? He doesn't get around to it . As mentioned in the introductory event, the phone is only sold online to reduce marketing and sales costs. Combined with a small February 18-22 purchase window, the website downtime and the most important fact that you even need internet access to buy the phone make it inaccessible to the poor. How can you stop the means of accessing the Internet by selling it on the Internet in the first place? It certainly doesn't make sense because, as it stands, the only people who would go to the trouble of buying this phone would be the middle class who already have good equipment and intend to buy one as a backup or just for that reason . The company didn't mention its plan for offline sales. Given the device's retail price, it wouldn't be a surprise if there isn't one. After all, selling offline over a wide network ensuring everyone has the opportunity to buy would mean more middlemen and an existing profit margin to feed them. To recap, the phone costs $ 3.7.
Calling would be incomplete if we didn't mention the performance. However, Performance for the Freedom 251 is a point of discussion. For $ 4, you can use it as an alarm clock and still be happy with its performance. But it's still a phone and an Android. As such, it can perform all the functions one would expect from a low-end handset. You will obviously not be able to run the latest asphalt on it, nor would you be able to capture excellent low-light pictures from the camera. Given the bang-per-buck ratio as an end-user, this is probably the best device to buy on the market right now (in terms of value).
Ringing Bells Pvt. Ltd.'s Freedom 251 certainly has a lot of us talking to. Whether you smell a fraud in the manufacturing process, or if you foresee a future exposure of a corruption racket that was caused in the manufacture of the device, or if you see a visionary team of entrepreneurs aiming to disrupt the market, we can all agree that freedom has asked us many questions. We hope the company keeps its promise to bring the poor man his phone and open up opportunities for his world.
What do you think of freedom 251?Are you looking forward to buying this device in your country, if it ever arrives?Will the phone spur other manufacturers into a race to the bottom?Let us know what you think in the comments below!
Photo credit: BigBillionDayApp.in
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