Within minutes of online bookings for the world’s cheapest smartphone opening, the Noida-based manufacturer, Ringing Bells, had to suspend them due to a server overload.
“Dear friends, we are very grateful for your enormous response … and would submit that as of now we received approx. 6 Lacs hits per second … servers are over loaded,” the company said on the website freedom251.com. “…we… are therefore taking a pause and upgrading the service and will revert within or before 24 hours.”
But critics saw a different script. They feel the decision to suspend the online bookings was not only because of heavy traffic, but alleged that the whole thing was just a marketing gimmick.
They even compared the product with the government’s “failed” product Akash, which was also launched as the world’s cheapest tablet at ₹2,500 ($35) by DataWind over three years ago.
“Okay, so you have to pay for the #Freedom251 now and the product will be delivered after four months? …the ‘Pay Now’ button is the new Refresh Button developed by #Freedom251,” said @iamsohal_yuvian, on a social media site.
‘Impossible mission’ According to analysts, handset makers and industry veterans, it is not possible to make smartphones at such a low cost.
“In realty it is not possible because even a memory card, a chipset or a processor costs more than the whole handset. I don’t see it as a serious business model. I am also worried about the security of money of buyers who have booked the handset,” SN Rai, co-founder, Lava Mobiles, told BusinessLine .
Sanchit Vir Gogia, Chief Analyst at Greyhound Research, said there must be some hidden subsidy without which it is not possible to sell at ₹251.
“Selling of smartphones is dependent on at least two factors: pricing and experience. I don’t see such things about this smartphone. Also, the customers they are targeting would not be having credit cards,” said Gogia.
He also said with the founding members of the company not having any technology background (they have been in the agri commodities business in Uttar Pradesh for the last 36 years) and the handset being loaded with ‘Make in India’ apps clearly indicates that there could be some arrangements (at the government level).
Some support However, DataWind CEO Suneet Singh Tuli has a different take. He welcomed “anybody interested in breaking price barriers”.
“A 3G device with the specs offered, has a base manufacturing cost almost 8X higher than what’s being offered. So, we’re interested in learning how they’ve achieved this, including all the licensing fees, etc,” he said, adding that if Ringing Bells keeps up the quality, this will act as a challenge to the entire handset market.
However, he also said that if it turns out to be a promotion, it will set a negative example for the industry. “We hope this is broadly available to the 100 crore Indians that need such affordable technology,” Tuli said.