Mohit Goel, founder of Ringing Bells, personally hand delivered the first Freedom 251 smartphone to its first buyer. And this is just the beginning as thousands of Freedom 251 smartphones will be delivered over the next few days, that too at a huge loss.
The company has promised delivery of 2 lakh handsets out of 7.5 crore which had registered to get their hands on the world’s cheapest smartphone. This makes one wonder how is Rs 251 smartphone possible and is the company going to make up for these losses.
According to ET, the company is taking a hit of Rs. 271 for every Freedom 251 smartphone sold. The original plan was to cover the losses by cutting a deal with app makers to pre-install their apps on the device to generate some revenue.
During the smartphone’s launch event back in February, the company officials said that the real-cost of the device would be recovered through measures like economies of scale, reduction in duties and by creating an e-commerce marketplace. But those plans have taken a hit thanks to a flurry of negative reports and controversies surrounding the handset.
“Many app makers deserted us after the company got embroiled in controversies,” said Goel in a statement.
Though Goel still seems unfazed and is rather adamant about his ambitious plans. He’s now planning to sell LED TVs under Rs. 10,000, hoping to make up losses on Freedom 251 smartphones with sales of LED TVs. He is also banking on sales of recently launched smartphones to come to the rescue.
With every new move, Goel’s audacious plans to stay in the game seem a bit too far-fetched. He claims there’s no shortage of funds as the company has a strong backing of its investors. Despite all of that, things appear rather bleak, and there are signs of an impending disaster in the making.