Indian start-up to begin shipping $4 smartphone at $440,000 loss

27 Jun 2016

Indian telecoms start-up Ringing Bells has revealed it’s set to finally begin shipping its Freedom 251 phone, once thought of as a media pipedream, to customers at $4 a phone – a massive loss.

Revealed back in February, the $4 smartphone had sounded, frankly, too good to be true given that the costs involved in creating a smartphone clearly exceed the advertised price.

While you’d think that any spec at all is reasonable at $4, Ringing Bells said the Freedom 251 would come with a 4-in 960 x 540 LCD display, 1GB of RAM and 8GB of internal, expandable storage, and a 1,800mAh battery, all of which would be operating on Android 5.1 Lollipop.

Future Human

Mired in doubts

Not bad, considering the phone costs less than the price of the average sandwich.

Now, according to The Indian Express, eager buyers who ordered the phone at the start of the year will be able to get their hands on them soon enough.

The company has confirmed that the first batch of devices – totalling 200,000 devices, with hopes to release a further 200,000 in the near future – will be shipped this week.

However, concerns over whether the company even has a $4 smartphone have persisted since initial announcements, with few getting their hands on one for testing, and the rather questionable decision to launch the phone with a prototype model that appeared to be a re-branded phone from another Indian manufacturer, Adcom.

‘We will have a loss, but I am happy’

As for how sound a business decision this will be for Ringing Bells, the business model seems to be in-line with OnePlus’s decision to get as many devices on the market as soon as possible. This, however, takes it to a whole new level.

According to the company’s founder and CEO, Mohit Goel, the company will lose 150 Indian rupees ($2.20) on every single device sold, which – based on its schedule of shipping from 30 June – will see it lose over $400,000 per shipment.

“We will have a loss, but I am happy that the dream of connecting rural and poor Indians as part of the ‘Digital India’ and ‘Make in India’ initiatives has been fulfilled with Freedom 251,” Goel said of its launch.

It’s now just a case of waiting to see whether this enormous gamble will pay off (in the long-term) for the Indian start-up.

Indian family with phone image via Shutterstock

Colm Gorey was a senior journalist with Silicon Republic