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The $4 smartphone in India is probably too good to be true

Sure, you can get this smartphone in India for a fraction of the price of an iPhone, but are you also getting a fraction (or even less) of the quality? After being stunned by the mere existence of a $4 smartphone in southeast Asia, market experts and analysts are now crying foul play on this deal that really does seem to drive home the point: when things seem too good to be true, they probably are.

On Wednesday this week, Ringing Bells debuted its Freedom 251 smartphone, with relatively admirable features including a 4-inch display, 1.3-GHz quad-core processor, and 8 GB of storage. Made in India and cheaper than a meal at McDonald’s, the phone was sold for just 251 rupees, or $3.65. The idea, the company said, was to grant a greater proportion of the Indian population access to smartphone technology, helping to bring one of the world’s most populous nations online. But now, everyone has their guard up.

“This seems to be a joke or a scam. It is something we are very upset about,” said Pankaj Mohindroo, national president of the Indian Cellular Association. “This is being investigated by various government authorities.” Mohindroo noted that the retail price of the phone doesn’t even cover the cost of its parts — in a letter to India’s Minister for Communications and I.T., the Association president pointed out that a phone using the least expensive parts available would still have to cost at least $40, and after taxes and duties were factored into consideration, would have to go for a bare minimum of $52.

Those outside the country expressed similar concerns — according to Richard Windsor, an analyst at Edison Investment Research, Ringing Bells puts itself $26 in the hole with each smartphone it sells at the sub-$4 price. “This launch has generated a lot of waves, and we suspect that either after the first batch has been sold, the price goes up to $53 per device or that the company quietly disappears,” he told CNN. “There is no way that these economics add up in the long term.”

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But beyond the economics of the smartphone, others are pointing out that the device itself is complete trash. According to Android Authority, “the Freedom 251 is actually the Adcom Ikon 4, an entry-level Chinese smartphone. Not only is this a scam, but it’s one where the scam artist isn’t even trying! What’s more, the device looks nothing like the smartphone advertised on Ringing Bells’ website.”

While cheap smartphones in India are nothing new, the almost absurd price point of the Freedom 251 created quite a frenzy in the country — the company’s site actually crashed after being overloaded by some 600,000 hits per second. But whether all that hype will actually come to fruition has yet to be determined — deliveries for the phone are expected by June.