Feb 20, 2016

FREEDOM 251 Business Model

FREEDOM 251 Buisness Model Image Credits: Google Image Search 
A smartphone for 251 rupees!! Yes it's possible says a risk taking entrepreneur from India. Freedom 251 is a new smartphone launched in "Make in India Week" from a company named Ringing Bells. Soon after the announcement it got lots of attention for introducing an Android phone called Freedom 251, which only costs about Rs.251 INR ($3.71).

This is the phone that could take those people who are left behind and take them to a whole new world, this is the phone that can empower the whole nation, change the digital divide and make a digital connect  contributing to Digital India.

This smart phone created lot of controversy, the product went viral on TV, social media, digital and print media, there's a lot of debate going on around this phone, it sounds great to have such an affordable phone, but the math for the parts doesn't add up. Some think it is possible to sell this phone for such low cost but majority think it's a scam.

Let's understand it's business model to arrive at a conclusion.

Can Freedom 251 phone actually exist?
If customer exists Freedom 251 exists.

Where is Freedom 251 phone manufactured?
The phone will be manufactured in Noida , two plants will be set up for Rs 250 crore each.

How is Ringing Bells company managing funds?
The money will come in the form of debt and equity (1.5:1)

Is Freedom 251 smartphone being subsidized by the central government?
NO says the Ashok Chaddha [President of Ringing Bells]

How many smartphones will be shipped in first go?
50 lakh phones will be delivered in first phase.

Can the company Ringing Bells deliver the product to millions at this cost?
Let's wait and see!

How can they sell Rs.2,500 worth phone for Rs.251/-?
Through the earnings from a marketplace that the company will be setting up.

What's the risk of consumer buying a Freedom 251 smartphone?
It's like spending money on tasteless Pizza.

Empowering every Indian with a device which will connect them.

Business Model - Freedom 251

Freedom 251 pricing is strategized on four pillars, the real cost of the device is Rs 2,500, which will be recovered through radical measures like

1. Economies of Scale   (Read what is Economies of Scale)
2. Innovative Marketing
3. Reduction in Import Duties
4. Create eCommerce Marketplace

How Freedom 251 leverages "Make in India" policy introduced by Government?
When a phone is made in India 13.5% import duty is saved which will be passed on to customer.

Other Revenue Models:
If app-makers pay them to have apps pre-installed on the device (but more apps installed will slow down Freedom 251 smartphone).

First Shipping Date:
June 30, 2016

Technical Specs -Freedom 251
Screen: 4" IPS display
Processor: 1.3 GHz
RAM: 1GB + 8GB expamdable upto 32GB
Camera: 3.2 mega pixel
Battery: 1450 mAh

#Freedom251 Booking Closed

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