Freedom 251 may be a scam, experts warn as serious questions arise about the $4 smartphone and the embattled company that makes it decided to suspend online sales.
The Indian company Ringing Bells made waves this week when it announced that it would be selling the lowest-priced smart phone of all time, for Rs 251 or $4 USD. But as many began to question the true origin of the phone, Ringing Bells announced on Saturday that it would be suspending all online sales of the Freedom 251.
— Prakash Mote (@Prakash_Mote) February 20, 2016
Officially, Ringing Bells said it was stopping sales of Freedom 251 because it could not keep up with demand, but many believe it is more closely related to questions about the phone’s legitimacy. The Indian Press reported that the Freedom 251 is really just a re-packaged version of the Adcom Ikon 4, a lower-tier smartphone actually made in China.
If true, this would appear to directly contradict the company’s own promotion that their phone was made in India.
“With Make in India campaign going on in the country, the company plans to contribute to the program and empower Indian citizens with a smartphone for lowest possible price,” company officials said (via Phone Radar). “How we are achieving such feat is by creating a large demand, which means large bookings. Producing something at large lowers down its costs, which is the economics of scale. And by spending less on marketing, we are reducing costs.”
There are also questions about the phone’s price from the mobile industry as well. Indian Cellular Association national president Pankaj Mohindroo wrote that the phone appears to cost well above the Rs 251 price to make.
“For your kind information, the bill of material value for a product like this when sourced from the cheapest supply chain cost approximately Rs 2,700 ($40). And this, when translated into retail price after addition of applicable duties, taxes and with distribution and retail margins would be at least Rs 4,100 ($60) while the product is being sold at Rs 251,” Mohindroo wrote.
Others believe the Freedom 251 is a scam of a different kind. BJP MP Kirit Somaiya said on Friday that he believes the company Ringing Bells is actually a “ponzi scheme.”
“This is a huge scam, that is why I went through all the papers of the company. The government has informed Uttar Pradesh government to check the bonafide of the promoter. This is a Ponzi bogus company scam,” Somaiya told ANI (via the Indian Express).
— PhoneRadar (@phoneradarblog) February 20, 2016
There had actually been warnings about the Freedom 251 dating back from before its launch, the Indian Express added.
“Apart from the jaw-dropping price, the company that was set up five months ago by Amity University graduate Mohit Kumar Goel, is also in the midst of controversy with analysts alleging that its maker has merely rebranded a device by its rival, Adcom.
“Analysts allege that the design of Ringing Bells’ Freedom 251 handset resembles that of Adcom’s Ikon 4, which is already available in the Indian market at Rs 3,999. Interestingly, most built-in app icons on the Freedom 251 seem to be a direct copy of icons on Apple’s iPhone, they added.”
Despite all the questions surrounding its origin and pricing, the Freedom 251 managed to generate gigantic sales in the few days after its launch. Android Authority reported that the company received nearly 50 million registrants since pre-orders opened. The company was still moving forward with plans to ship its 2.5 million phones, with the first shipments reportedly going out by April 10 at the latest. The entire run was expected to be done by the end of June, the report added.
[Photo by Saurabh Das/AP Images]