Ringing Bells, the Noida-based firm that ran into controversy after announcing a Rs 251 phone five months back, today claimed it will start shipping the cheapest smartphone ever, from tomorrow.
In February, the company announced the Freedom 251 phone which saw a mad rush of over 70 million people jostling to register but when the prototype was presented to media it turned out to be produced by another manufacturer with its logo covered.
This led to protests from buyers and consequent inquiries by police and tax officials, forcing the company to stop sale of the product and offer refunds to those who had booked the phone.
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The Freedom 251 prototype touts a quad-core processor, a 4-inch screen and front and back cameras, priced at an astonishingly low rate of Rs 251.
Ringing Bells Director Mohit Goel, who had last week stated that his company will soon start shipping 200,000 smartphones to buyers picked by lottery, today said deliveries will start as early as tomorrow.
"We will start delivery of 5,000 Freedom 251 phones in the first phase from tomorrow," he told reporters at an event organised to unveil new models as well as an LED TV priced at Rs 9,990.
Ringing Bells had last month stated that it will start deliveries for 2 lakh handsets from June 30 initially, then mentioned 10,000 devices will be given to customers in 19 states, and has now brought it down to 5,000 devices.
Goel said the first batch of 5,000 'Freedom 251' devices will be out for delivery from July 8 and buyers will have to pay Rs 291, including Rs 40 as delivery charges.
He had previously stated that Ringing Bells faced Rs 930 loss on each phone, which cost Rs 1,180 and the parts were imported from Taiwan. He had claimed that Rs 700-800 will be recovered from app developers and advertisement revenue.
When the phone was announced in February, about 30,000 people paid in advance for booking the phone and over 7 crore people registered for it, which is equivalent to the phones Samsung and Apple sell in an entire year.
Today, Goel claimed that the company is ready to ship 2 lakh units of the smartphone for Rs 251 each, but "only if it gets government support". He, however, said that Ringing Bells will ship two lakh units to people who registered for it even if the company doesn't get government support but it will take time.
The company also unveiled four new feature phones in the range of Rs 699-999 and two budget Android smartphones that are priced between Rs 3,999 and Rs 4,499.
It also unveiled three power banks, and a 31.5-inch HD LED TV priced at Rs 9,900 that will be launched on August 15.
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The Freedom 251 handset showcased by the company today has 1GB RAM, 8 GB internal memory, 3.2 megapixel main camera and 0.3 mp front camera, 1.3 Ghz quad core processor, 1,450 mAH battery and dual sim slot.
Given the massive demand, the company would use "lucky draw" to select customers for the 2 lakh handsets that it plans to deliver.
The "lucky draw" mechanism has also been used for selection of 5,000 customers who would get the handsets in the first phase.
Goel said while the cost of the phone worked out to Rs 1,180 a unit for the company, it was able to recover Rs 251 from customers (selling price of the phone), Rs 300 by bundling apps, and yet has a deficit of about Rs 630 a unit.
"We have tied up with few mobile applications which are helping us bridge the cost deficit. Earlier, we were ready with our plan to sell the phone with profit but because of negative publicity, some of the apps moved out," he said.
Ringing Bells claims to have invested about Rs 80 crore in business. Of this, it has gathered Rs 40 crore from distributors, 33 per cent from stake sale to partners who are assembling its phones and LED TV, and the rest from internal resources.
Goel said that company has decided to use 95 per cent of the profits for charity.
"Except Freedom251, we are selling our other products at a profit. In LED TV, we have profit margin of 10-15 per cent. Similarly, some margins are there in our feature phone and smartphone which we will start selling from Monday," Goel pointed out.
He said that people can book its phone from Ringing Bells' wesbite from Monday by paying online or choosing cash-on-delivery option.
"The phone will be sent to people on the same day in areas where we have distributors, and in 3-4 days via courier to places where we don't have our network," Goel said.
He said that online booking of LED TV will start in same manner between July 20-25 and its delivery will start from August 15.
Ringing Bells President Ashok Chaddha said that company has written to Prime Minister Narendra Modi on June 28 to share its vision on digitally connecting 75 crore people in the country.
"At the moment, we are assembling our phones and TV in India at three plants located in Haridwar, Noida and Mumbai. Our aim is to have our own manufacturing plant which we will do once we have market support," Chadhha said.
