Currently a big hype going on in India about the new 4$ Smartphone introduced by the company Ringing Bells. But the question is how they managed to set the price very low? what are the reasons behind it?
With price being so low people are raising concerns about the quality of phone, will it be able to perform good?
First reason behind the low price is that company is expecting a lot of cuts. They are expecting state governments to waive duty fees, through the Make in India initiative (though, 70% of the phones will be made in Taiwan). Finally, they say the remaining cost reductions will be made through ‘economies of scale.’
Phone would cost 35$ to 45$ without these cuts. The idea to sell the phone at 251 INR is to make it’s brand famous, then use that fame to sell future products at high price. They are planing to sell only 2,00,000 phones at 4$ price. Same scheme worked for Datawind who produced world’s cheapest tablet Aakash Tablet at US $37.99/unit. and now Ringing bell is sure following their lead.