India's $7 Smartphone Set to Disrupt World's Third Largest Mobile Market

[MacRumors]

An Indian handset maker will tomorrow launch the country's cheapest smartphone, in a move that's likely to disrupt its booming mobile market of over 200 million users.

Called Freedom 251 and priced at under Rs 500 ($7), the handset is being manufactured by domestic handset maker Ringing Bells as part of the government's Made in India campaign, which promotes and encourages local manufacturing.

The introduction of the handset, which is likely 3G-enabled, has received full backing from the country's Prime Minister Narendra Modi, who described the launch as "empowering India to the last person" and "transforming India's growth story," the Noida-based company said.

"The phone will be popularly priced at under Rs 500 and the launch stands as a true testimony of success of the latest initiatives taken by the Government of India," read media invites sent out by the firm.

Ringing Bells recently launched one of India's cheapest 4G handsets at Rs 2,999 ($43), however the most affordable smartphones in India are currently priced between Rs 1,500 ($22) and Rs 2,000 ($29). Another Indian company called DataWind announced plans last year to launch the world's cheapest smartphone at Rs 999 ($14.6), but that device has yet to hit the market.

Apple CEO Tim Cook recently praised India's business environment during a town hall meeting and stated that the company is putting increasingly more energy into the country, which has the third largest smartphone market in the world, behind China and the U.S.

Just last month, Apple sent an application to the country's Department of Industrial Policy and Promotion (DIPP) for approval of several planned retail outlets in India, in which less than one third of the population uses smartphones.

In December, Apple cut the prices of its iPhone 6s and 6s Plus handsets in India by up to 16 percent, following a reported dive in sales. The move quickly followed Apple's decision to halve the price of iPhone 5s, from 45,500 Rupees to 24,999 Rupees.

Article Link: India's $7 Smartphone Set to Disrupt World's Third Largest Mobile Market

 

[Pfunstuff]

An Indian handset maker will tomorrow launch the country's cheapest smartphone, in a move that's likely to disrupt its booming mobile market of over 200 million users.

Called Freedom 251 and priced at under Rs 500 ($7), the handset is being manufactured by domestic handset maker Ringing Bells as part of the government's Made in India campaign, which promotes and encourages local manufacturing.

The introduction of the handset, which is likely 3G-enabled, has received full backing from the country's Prime Minister Narendra Modi, who described the launch as "empowering India to the last person" and "transforming India's growth story," the Noida-based company said.

"The phone will be popularly priced at under Rs 500 and the launch stands as a true testimony of success of the latest initiatives taken by the Government of India," read media invites sent out by the firm.

Ringing Bells recently launched one of India's cheapest 4G handsets at Rs 2,999 ($43), however the most affordable smartphones in India are currently priced between Rs 1,500 ($22) and Rs 2,000 ($29). Another Indian company called DataWind announced plans last year to launch the world's cheapest smartphone at Rs 999 ($14.6), but that device has yet to hit the market.

Apple CEO Tim Cook recently praised India's business environment during a town hall meeting and stated that the company is putting increasingly more energy into the country, which has the third largest smartphone market in the world, behind China and the U.S.

Just last month, Apple sent an application to the country's Department of Industrial Policy and Promotion (DIPP) for approval of several planned retail outlets in India, in which less than one third of the population uses smartphones.

In December, Apple cut the prices of its iPhone 6s and 6s Plus handsets in India by up to 16 percent, following a reported dive in sales. The move quickly followed Apple's decision to halve the price of iPhone 5s, from 45,500 Rupees to 24,999 Rupees.

Article Link: India's $7 Smartphone Set to Disrupt World's Third Largest Mobile Market

Too bad the iPhone isn't $7...

 

[Laptopdog78]

I wish I could buy things with peas! Mushy or garden, that would be great!!

 

[Carlanga]

is part of the cost gov assisted?

 

[bryanescuela]

In which country will their Customer Service be? United States or India?

 

[Scottsoapbox]

Makes $799 seem a little ridiculous...

 

[Studioman]

An Indian handset maker will tomorrow launch the country's cheapest smartphone, in a move that's likely to disrupt its booming mobile market of over 200 million users.

Called Freedom 251 and priced at under Rs 500 ($7), the handset is being manufactured by domestic handset maker Ringing Bells as part of the government's Made in India campaign, which promotes and encourages local manufacturing.

The introduction of the handset, which is likely 3G-enabled, has received full backing from the country's Prime Minister Narendra Modi, who described the launch as "empowering India to the last person" and "transforming India's growth story," the Noida-based company said.

"The phone will be popularly priced at under Rs 500 and the launch stands as a true testimony of success of the latest initiatives taken by the Government of India," read media invites sent out by the firm.

Ringing Bells recently launched one of India's cheapest 4G handsets at Rs 2,999 ($43), however the most affordable smartphones in India are currently priced between Rs 1,500 ($22) and Rs 2,000 ($29). Another Indian company called DataWind announced plans last year to launch the world's cheapest smartphone at Rs 999 ($14.6), but that device has yet to hit the market.

Apple CEO Tim Cook recently praised India's business environment during a town hall meeting and stated that the company is putting increasingly more energy into the country, which has the third largest smartphone market in the world, behind China and the U.S.

Just last month, Apple sent an application to the country's Department of Industrial Policy and Promotion (DIPP) for approval of several planned retail outlets in India, in which less than one third of the population uses smartphones.

In December, Apple cut the prices of its iPhone 6s and 6s Plus handsets in India by up to 16 percent, following a reported dive in sales. The move quickly followed Apple's decision to halve the price of iPhone 5s, from 45,500 Rupees to 24,999 Rupees.

Article Link: India's $7 Smartphone Set to Disrupt World's Third Largest Mobile Market

This is actually a positive for Apple. They benefit from more mature markets that are saturated with crap products. A nation of people using these phones will be prime to upgrade to a better experience. Then there's the status of having a real iPhone. Like every other market, Apple will be able to skim the profitable sales of the top and leave the others in a fight for the bottom. People don't buy on price, if they did Apple would have been closed 30 years ago.

 

[Taz Mangus]

Makes $799 seem a little ridiculous...

It also makes an Android priced at $349 phone seem a little ridiculous.

 

[Mums]

is part of the cost gov assisted?

Lol - the government of India does not assist the people - more like their own pockets.

 

[Scottsoapbox]

It also makes an Android priced at $349 phone seem a little ridiculous.

Yes I was referring to all US smartphones as expensive. If I was specifically calling out Apple I would have noted their $949 top end.

 

[cableguy84]

You get what you pay for

 

[ArtOfWarfare]

Pretty sure the toy phone my 18 month old niece got for Christmas cost most than $7, and all it does it flash and make sounds.

 

[Abazigal]

What's the point behind this article? Samsung didn't disrupt Apple. Neither did Xiaomi or any other smartphone company whose business model basically meant flooding the market with tons of cheap phones.

As it turns out, the people who want an iPhone will still get one, and be willing to pay its asking price for one.

What makes this instance any different?

 

[Taz Mangus]

Yes I was referring to all US smartphones as expensive. If I was specifically calling out Apple I would have noted their $949 top end.

Interesting that you chose the $799 price target. Why not everything above the $100 or $200 price target which also seems a little ridiculous compared to $7.

It is obvious that the $7 phone is being government subsidized. No company can stay in business and produce a $7 phone given parts and labor costs.

Your original statement seems a bit naive.

 

[JustaTecho]

I don’t see what all the fuss is, it’s a disposable phone, made with the cheapest labor, cheapest parts, and not made to last. It will likely be tied to all kinds of safety incidents. There will be no customer support, you bought it, you’re stuck with it, it doesn’t work, throw it away and buy a new one...

Returns and Customer service after a sale in many countries around the world DON’T exist…

When you don’t have to stand behind a product, and ensure that it doesn’t hurt someone or burn a house down, then products can be made very very cheaply…

Would I buy one, perhaps if I needed a phone and I made only a few dollars a week, but i am fortunate and I can afford slightly better things these days...

 

[SBlue1]

Great for all the people in the developing countries. "Dumb" mobile phones are already changing the face of Africa and empowering millions of Africans and connecting them to the world. No matter how "cheap" this thing will be they should sell it to African countries too. People being used to smartphones opens up chances a small percentage will upgrade to iPhones one day. And just 1% of the population of India means 12,500,000 people!

 

[69Mustang]

This is actually a positive for Apple. They benefit from more mature markets that are saturated with crap products. A nation of people using these phones will be prime to upgrade to a better experience. Then there's the status of having a real iPhone. Like every other market, Apple will be able to skim the profitable sales of the top and leave the others in a fight for the bottom. People don't buy on price, if they did Apple would have been closed 30 years ago.

There's a lot of presumption behind the thought that the products will be crap; an assumption based on the sale price I assume. The phones are most likely gov't subsidized so there's no real correlation between price and quality. The phones could easily rival the quality of Xiomi's offerings. As for Apple offering a better experience, it's an opinion. One that's not backed up by the numbers. These phones will most likely have no affect on Apple's sales in India. Apple's market is premium handsets. The people choosing premium handsets typically choose between Apple and Samsung. Those choosing Apple aren't that numerous right now (less than 2%). There is a world of difference, and a lot of handset price points, between $7 and $700. Even at upgrade, this isn't a cross shopping opportunity.

People don't buy on price? Yes they do. They also buy on value, perception, acceptance, peer pressure, and myriad other reasons. Blanket statements tend to paint people in corners. Unnecessarily.

 

[dannyyankou]

Makes $799 seem a little ridiculous...

It would only be ridiculous if no one paid for it. But hundreds of millions are paying for it, so it's smart business.

 

[Taz Mangus]

It would only be ridiculous if no one paid for it. But hundreds of millions are paying for it, so it's smart business.

And a smart company understands how market forces work.

 

[AleXXXa]

It would only be ridiculous if no one paid for it. But hundreds of millions are paying for it, so it's smart business.

I'm the owner of a restaurant that serves €499 gold wrapped burgers. People buy them every day, but even I know it's ridiculous.

 

[dannyyankou]

I'm the owner of a restaurant that serves €499 gold wrapped burgers. People buy them every day, but even I know it's ridiculous.

Yeah, something is only worth what people are willing to pay for.

 

[Chatter]

Interesting that you chose the $799 price target. Why not everything above the $100 or $200 price target which also seems a little ridiculous compared to $7.

It is obvious that the $7 phone is being government subsidized. No company can stay in business and produce a $7 phone given parts and labor costs.

Your original statement seems a bit naive.

Unless you can point otherwise, it is not "obvious" that there is a Govt subsidy. As background, Ringing Bells is a new manufacturer and sells other phones in the sub $50 range.

But if you can link to a Govt subsidy, that would be appreciated.
[doublepost=1455638520][/doublepost]

There's a lot of presumption behind the thought that the products will be crap; an assumption based on the sale price I assume. The phones are most likely gov't subsidized so there's no real correlation between price and quality. The phones could easily rival the quality of Xiomi's offerings. As for Apple offering a better experience, it's an opinion. One that's not backed up by the numbers. These phones will most likely have no affect on Apple's sales in India. Apple's market is premium handsets. The people choosing premium handsets typically choose between Apple and Samsung. Those choosing Apple aren't that numerous right now (less than 2%). There is a world of difference, and a lot of handset price points, between $7 and $700. Even at upgrade, this isn't a cross shopping opportunity.

People don't buy on price? Yes they do. They also buy on value, perception, acceptance, peer pressure, and myriad other reasons. Blanket statements tend to paint people in corners. Unnecessarily.

Again, I cannot find any info if this is Govt subsidized. And that is not a "likely assumption" in India. But would love to see a link if it is indeed subsidized.

 

[JosephAW]

If apple was smart they offer an iOS lite for these phones.

 

[69Mustang]

Again, I cannot find any info if this is Govt subsidized. And that is not a "likely assumption" in India. But would love to see a link if it is indeed subsidized.

With the amount of government participation in the launch of the product, the preponderance of evidence suggests government subsidy.
http://www.smartcritique.com/freedom-251-indias-cheapest-smartphone-for-just-inr-500/

Most relevant portion: "Ringing Bells is a Noida-based company and has named this smartphone Freedom 251, which is being launched on 17th February, tomorrow. Apparently, the device will be unveiled by the Defence Minister Manohar Parrikar, while the Member of Parliament Murali Manohar Joshi is expected to preside over the event. The price of the phone stands as a testimony to the vision of India’s government under the leadership of Narendra Modi, which is to ‘empower India to the last person’. The phone is supported by the central government as its part of Make in India and Digital India initiatives."

Definitive? No. Likely assumption? I'd say so.

 

[opeter]

Sadly a country, where more people have access to mobile phones, than toilets.