Why is 'Freedom251' so cheap?

Because the price of anything is arbitrary and can be decided by the seller. It doesn’t have to have any correlation with the actual cost.

Though common business sense would dictate that you sell a product for a little more than what it cost you to make it (including fixed costs which are spread out over multiple products), this isn’t always followed.

Freedom251 is a clear scam.

In Feb 2016, the founder claimed that he would “make a profit of Rs 31 per device”.

And just a couple of days ago (Jul 2016), he filed a petition with the PMO asking for a whopping INR 50,000 Crore ($~7 billion) to “enable” his company to be able to provide the handset to 750 million Indians.

According to Ringing Bells Pvt Ltd CEO Mohit Goel, he initially faced Rs 930 loss on each handset that cost him Rs 1180 and for which parts were imported from Taiwan.

“I recovered Rs 700-800 from app developers and revenue generated through advertisements on Freedom 251 website. After selling the device for Rs 251 (cash on delivery), the total loss per handset is expected to be in the range of Rs 180-270,” Goel told IANS.

So, in the span of just 4 months, a profit per unit of INR 30 became a loss per unit of INR 180–270.

Also, the math doesn’t add up.

Even at the maximum loss of INR 270 per handset, the total loss would be INR(270*750)million, or INR 20,000 crore. And he is asking for an amount 2.5X higher than that.

A complete fraud, if you ask me.

This is just one recent discrepancy that has arisen.

Earlier, it was revealed that the smartphone (being marketed as “Made in India”) was actually bought from a Chinese firm called Adcom at INR 3600/piece. They also faced heat for copyright infringement when they copied the iOS icons without due permission. On being asked about it, one of the founders said,

When the Hindustan Times asked the company about possible Intellectual Property Rights (IPR) violation, Ringing Bells technical head Vikas Sharma said: “We used Apple’s icons because Apple hasn’t copyrighted its designs.”

which is just a huge load of bullshit. To think that the world’s most valuable company wouldn’t copyright its products, features, and/or designs shows how much the “CTO” knows about tech and business.

Finally, the company’s origin are themselves shady. The company was incorporated only 5 months prior to its big announcement.

A bit of digging revealed that the company was incorporated on 16 September 2015--precisely 5 months ago--and has three directors: Mohit Kumar Goel, Sushma Devi and Rajesh Kumar.

The promoter family happens to be from Western UP and have been--for the past three generations--in the business of agricultural commodity products such as dry fruits sugar, spices, rice, pulses and the like. With no heritage of technology, and specifically cellular products, it’s intriguing to note that the company is adopting such a radical strategy in the sale of their upcoming product.

Everything about the company, their promoters, and their unfounded, exaggerated claims, scream FRAUD.