Freedom 251 rings of a marketing fraud
On January 17, the Indian mobile phone industry was shaken by the news of the unveiling of a phone that is so cheap that even the Indian Cellular Association has said it is impossible.
Ringing Bells launched Freedom 251, a smartphone, priced at Rs 251 (around $4). The executives tried in vain to elucidate how and why they have set the price at Rs 251, even though the actual price of the phone is around Rs 2,500.
There is no way one can justify why a phone with a four-inch screen, Android Lollipop operating system, 8GB internal storage and 1GB RAM can be sold for so low a price. In order to understand why they have done this, we must look back a little.
Remember the $35 Indian tablet called Aakash? It was a government of India initiative and it was doomed from the start because the price the government was aiming for was ridiculous. The tablets were intended for students. But they were so bad that hardly anyone actually used them. Millions of rupees went down the drain. The government decided to shut operations.
There is, however, one company that benefited from that fiasco – DataWind. It was supposed to supply the $35 tablets. And it did. Although the quality and usability of those tablets were suspect, Datawind and the government ended up blaming each other for the fiasco.
Consequently, the buzz around the $35 tablet helped Datawind sell its own cheap tablets. In its commercial version, the Aakash was called Ubislate, and it sold like hot cakes owing to its low price. (Again, it is another matter that many people never got the delivery of the tablet, and those who got it, mostly got it late).
The Freedom 251 could be the beginning of something similar. The smartphone market is highly competitive in India. It is nearly impossible to break into it. Creating a buzz with something like Freedom 251 seems like a way to acquaint people with a brand called Ringing Bells.
There can be several ways to deal with the rush for the phone. Take the orders and share the sales figures with the media to create a bigger buzz. But the shipping of the actual products will only start four months after the orders are placed. Public memory is short. It is likely that when it’s time to deliver the actual product, there will be some deliveries and many cancellations.
In the interim period, Ringing Bells will start focusing on its other budget phones. It already has a phone called Smart 101, which has been priced at Rs 2,999. The company also has plans to launch more phones in the Rs 2,000 to Rs 3,000 price bracket.
The Freedom 251 is a marketing gimmick. On the failure and publicity of the Rs 251 phone, Ringing Bells will step into the market.