Is Freedom 251 a smart scam? All you need to know

After hogging limelight as the world's cheapest smartphone, the Rs 251 phone is now in the midst of a controversy with analysts alleging that its maker - Ringing Bells - has merely rebranded a device by its rival, Adcom.

Analysts allege that the design of Ringing Bells' Freedom 251 handset resembles that of Adcom's Ikon 4, which is already available in the Indian market at Rs 3,999. Interestingly, most built-in app icons on the Freedom 251 seem to be a direct copy of icons on Apple's iPhone, they added.

There have been speculations about how the company has managed to hit such ultra-low costs. According to the Indian Cellular Association, the bill of material value for a product like this when sourced from the cheapest supply chain cost approximately $40 (Rs 2,700).

When translated into retail price after addition of applicable duties, taxes and distribution and retail margins, the cost of the product would be at least Rs 4,100. ICA has written to Telecom Minister Ravi Shankar Prasad requesting him to get into depth of the issue, saying the price could not be below Rs 3,500 even after a subsidised sale.

Ringing Bells, on its part, said the manufacturing cost of the phone is about Rs 2,500, which will be recovered through a series of measures like economies of scale, innovative marketing, reduction in duties and creating an e-commerce marketplace. Ringing Bells has now suspended taking orders for 24 hours due to the overload. It said it had received approximately six lakh hits per second, which resulted in the overload.