Indian company launches “world’s cheapest smartphone”

Indian company launches "world's cheapest smartphone"

An Indian-based tech firm claims to have launched the world's cheapest smartphone, although critics have already raised questions about the device and the company's price strategy.

Ringing Bells claims its Freedom 251 phone has been priced at just 251 rupees (£2.56) and that its release had been greeted by a huge level of demand within the first few hours of it going on sale.

The phone, which offers a design some analysts have compared to Apple's iPhone 4, will feature 8GB of storage as well as cameras in the front and back and a home button and icons.

India currently has the world's second-largest mobile market, with one billion subscribers, although Ringing Bells remains confident that its new model can be successful.

Yet the phone's release has already been dogged down with questions from critics, many of which have claimed that the current release price is far lower than the total cost of components needed to create the handset.

With other costs, including production, distribution and marketing, it has left many analysts confused as to how the release of the new phone is being funded.

Tarun Pathak, an analyst with Counterpoint Technology Research, told Reuters: "It looks like it is highly subsidized by the company and it is not clear how they plan to sustain this."

Despite those concerns, the company has decided to press ahead with its plans.

And while not owning a factory in India, Ringing Bells has also insisted the new model will be manufactured locally, although the prototypes handed out to journalists were reportedly made in China.

A spokeswoman told the AFP news agency: "This is our flagship model and we think it will bring a revolution in the industry."

However, the company's efforts were dealt an early blow just hours after its launch, after having to stop accepting orders when its website crashed due to demand that equated to 600,000 hits per second.

Despite that setback, the company has promised to deliver the first devices within the next four months.