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Freedom 251 price clarified: Just how cheap can a smartphone get?

Freedom 251 price clarified: Just how cheap can a smartphone get?

India has just had another Tata Nano time, with the world’s most low-cost smartphone being declared here on Wednesday. There’s disbelief in the smartphone marketplace and the remaining portion of the world while there is understandable excitement across the country over the Rs 251 price point of the Ring Bells Freedom 251 smartphone. To place things in perspective, the cheapest smartphone available in India at present is the known Trio Smart Touch Phone Junior 3, priced at Rs 1,449 on Flipkart.That’s a 2G phone.

The Freedom 251, on the other hand, is a dual-SIM 3G smartphone with a 4-inch IPS touchscreen, 1.3 GHz quad-core processor with 1 GB RAM and 8 GB ROM, as well as a 3.2 MP camera. The cheapest phone with specs like these would be the Rs 2,999 Datawind Pocketsurfer 3G, which has a less powerful processor and capacitive touchscreen.

Unbelievable Low-cost Smartphone

Rs 251 is hard to digest for many people in the industry. Indian Cellular Association president Pankaj Mohindroo said this “pricing isn’t possible under any circumstances, even if the components are created in India”. He said the bill for stuff for a product in this way would be around $ 40. Sunit Singh Tuli, CEO of Datawind, to place a similar price point, saying a mobile with these specs should cost. Analyst Sanchit Vir Gogia, CEO & Founder at Greyhound Knowledge Group, said the lowest price point seen so far was $ 28, or about Rs 1,700.

Logic behind low-cost handset

Firm’s logic Ringing Bells president Ashok Chadha says the price would be achieved by making in India at facilities the company is setting up in UP and Uttarakhand. The economies of scale would kick in after the company accomplishes a producing capacity of 5 lakh units per month. He also implies that parts would be procured, which would help prevent the 13-odd per cent tax duty on imports.

Made in India

Specialists like Gogia, however, say that if components are found locally, they’re higher priced than imported parts. Made in India lots of the gains will come when the phone is made in India. The branding is visible if the stickers are removed, and this variant, at least, won’t qualify for being “Made in India”.

How Pricing Freedom 251 Works?

Mobiles normally have a bill of material (BoM) cost in addition to which comes the producing cost, plus parts like taxes and duties, and marketing cost and gains — collectively making up the closing selling price. In offline sales, the dealer has a substantial allowance — which is the reason why you see significant variations in costs of the exact same merchandise. In the BoM, generally the mobile radio is the most costly — making up about 30% of the price.

The mechanical parts come next, followed by the screen, storage/ the camera part as well as memory. In devices such as the Apple iPhone (as also in a number of the more recent budget apparatus in the marketplace) the screen could wind up being the most expensive part. To give an example, based on US business analysis company IHS Inc, in the iPhone 5s, the 4-inch retina screen was priced at $ 32 at $ 41 along with the wireless module.

The central processing unit in comparison was only $ 19 in the 16 GB variant, which had an entire price of $ 198. As well as the screen should cost less.