Freedom 251 has been able to get the attention of Million of Indians in a short span of time. It is obviously because of its unbelievable price tag of Rs. 251 and that too as company Ringing Bells claims the phone will be fully loaded touch screen smartphone. If we go by the advertised specifications and features, then such a phone could be priced at an approximate price of Rs. 2500 to 3000. So how come company has promised to deliver the phone at such a low price.
Well, debates have already been started that Freedom 251 is probably going to be the scammiest of the scams. Company’s office has already been raided by Income Tax and ED and they have also quizzed its owner cum promoter Mohit Goel for hours but still there has been no official confirmation from these legal entities about this being scam. Hence, no arrest or action has so far been taken against the company. However, repeated allegations in media on their business model has forced its owner to refund the money they had collected via online bookings. Instead, the company has not decided to deliver phone only via Cash On Delivery model. Company says, this is only to win the lost trust of the potential customers.
Company has also stated that they will start with the delivery of the first phase of phones from April 15, 2016 and will continue till end of June/July 2016.
Now, question arises if Freedom 251 is not really a scam (so far), then what could be the secret business model that company Ringing Bells is so confident about delivering the smartphone at a price of Rs. 251.
Practically, phone’s cost is quite higher than this, then how and who is funding the rest of the money and how company still so confident about making a profit.
Company has however, not yet disclosed their business model (of course so as not to leak their trade secret). We have tried to investigate on this to find out how company is so confident about making a profit even by selling Freedom 251 at a price of Rs. 251. We are not confident either about this being true or not but it could be a mere guess work that we have made.
Company in its advertisements has claimed that Freedom 251 comes with few pre-installed apps. Now, it is where their whole business model seems hidden. Though no confirmation from the company, we believe that probably there are around 14-15 different types of apps that come as pre-installed with the handset. It is assumed that these apps will be such that you won’t be able to delete them. Catch is, since these apps can not be uninstalled, the company owing those apps are giving money in lieu of such a feature. Because if an app can not be installed, then that means the company will immediately get around 25 Lacs subscribers (assuming this is the number of handsets booked in first phase) who will be forced to use their app since they can not delete it.
Now, cost of getting a user to make him download an app (like a shopping app etc) is quite high. So, with such a model they will immediately get such a high number of app users without much effort. Hence, they are happy and more than willing to fund a certain cost of the Freedom 251 phone. So, if we assume there are around 14 to 15 pre-installed apps then company of each app contributing towards the cost, the phone’s cost comes down to such a low level price of Rs. 251.
However, as we stated earlier, even we are not too sure about if it is a reality or not but its just a guess work that we have made. We don’t know if Freedom 251 is a scam or not but if we assume that it is not a scam then probably the business model that we just discussed above could be the one, company is relying upon to make it a success and still make a profit.
If you have any other thoughts on this, then please free to share below via comments.