Daijiworld Media Network
New Delhi, Feb 22 : Ever since Ringing Bells, a Noida-based start-up company announced a smartphone for Rs 251, there are several doubts and rumours being spread across the nation through social networking sites as well as mainstream media about the feasibility and durability of Freedom 251 smartphone.
Many said that the Ringing Bells could be a 'run-away' company as it is collecting orders now, but promising to deliver the orders only after mid-April, 2016. There were a few police complains filed against the company as well, and even the Income Tax officials visited the two-storey rented office of the company.
A few have questioned the ethics of the business and surprisingly, the major smartphone players have written to the government expressing the doubts about Ringing Bells' business model.
But the founder, Amity University graduate Mohit Goel in a statement to the media has claimed that the sensational price of Rs 251 per set is deliverable, and what's more, will bring Rs 31 profit for the company on each set.
The Freedom 251 website was down for the first couple of days due to unprecedented traffic, and very few could place the order. The company claims that in just a handful of days, 25 lac people have already booked the phone. The company has now decided not to take fresh orders.
In a interview to daily news paper, Goel asks "Why am I being hounded? What wrong have I done?". The director of Ringing Bells insists that his new venture is not a fly-by-night operation and will begin customer deliveries from April 15. "Has there ever been a case of income-tax evasion against me or my company, or has there been an FIR filed against me in any police station? Why am I being called a 'bhagora' (who'll run away with the money)? I intend to do a valid business, just like any other startup, and I have a business plan ready."
The company claims it has received over 7 crore registrations on its website since it started accepting applications on February 18. "We are taking online bookings for only 25 lakh units in the first batch due to limited supplies, while giving another 25 lakh through offline distributors. I will deliver the handsets before June 30. All the money that we receive from customers through the payment gateway will be kept in an escrow account and we will touch it only when we deliver the devices." The company has an account with ICICI Bank.
The dual SIM Freedom 251 device carries a 4-inch display, 1 GB RAM, 8GB internal memory with a 1.3 GHZ quad-core processor, dual cameras and comes with a charger, headphone and one-year warranty.
The president of the company Ashok Chaddha "The price that works out per device is roughly around Rs 1,500," Chadha says. insists, though significantly lowering it down from the Rs 2,500 he had announced on the day of the unveiling of the device. "We will source the devices from a supplier in Noida, who will be assembling the units for us after getting components from Taiwan." And while we do this, we also start the work to identify land and suppliers for setting up our manufacturing locations. For this, we have identified Noida while also looking at locations in Uttarakhand, West Bengal, Bihar and Punjab," Chadha says.
And just how does he bring down the cost to Rs 251, and also earn a profit? "Economies of scale gets it down to around Rs 1,200, and thereafter an online sales model cuts down marketing and sales expenses, giving us further savings," he says. And to this we will add marketing piggybacks from companies whose applications we load on the devices. We will save around Rs 300 per device more through this," Chadha says.
The company is also talking to large e-commerce companies, such as travel website Goibibo, to get their apps on the devices. "We will also monetize from the heavy traffic on our website and will make it into a marketplace for other brands to hop on. This will also help us to bring down the cost."