A company looking to offer the lowest-cost smartphone in the Indian market faces an investigation after questions were raised about its business processes.
Established last year, Ringing Bells was selling its Freedom 251 smartphone for a price of INR251 – less than $4. But not long after, doubts were raised about its ability to deliver the device at this price.
According to a Press Trust of India report, the company has now been the subject of a legal challenge by a local politician, against a backdrop of concern that the company is misleading potential customers.
Ringing Bells, in response, said it will cooperate with the relevant authorities. No action will be taken while the investigation is underway.
While there is no doubt that $4 is less than the bill of materials for the device, it is said to be supported by “innovative e-commerce cross promotions”.
Initial deliveries are set to be complete by the end of June 2016.
While the company launched in a blaze of headlines noting its low-cost proposition, a number of event shortly after dented its credibility.
Initial demo devices were actually a Chinese-made smartphone available in India as Adcom Ikon 4, which has a price tag of $60. Hindustan Times said that on a device it received, Adcom branding had been crudely concealed, with that company also denying any involvement in the project.
And it also featured a version of Android where many of the icons had been replaced by the iPhone equivalents (for example with the Safari tile in place of the Android browser). Some apps which should have been pre-installed were absent.
Ringing Bells, for is part, described the devices supplied as “previews”.
This did not dampen demand: according to phoneArena, demand caused the company’s e-commerce servers to crash, with customers also able to buy large quantities of the device in one go – causing problems for individual consumers.
And with the start-up also lacking much in the way of assets or experience, there were question marks over its legitimacy – although it swapped to a pay-on-delivery model rather than taking customer cash up-front, to ease some concerns.
Freedom 251 has a 4-inch screen, 1.3GHz quadcore processor, 1GB of RAM, 8GB of ROM with expansion slot, and 3MP rear and 0.3MP front cameras.