Indian company rolls out $5 smartphone

A new Indian company named Ringing Bells has introduced a smartphone for 251 rupees, about NZ$5.50, and has been met with a mix of scepticism and excitement.

The Freedom 251, aptly named after its price, is available to pre-order now with deliveries expected to be made by June 30, 2016.

The smartphone vaguely resembles the iPhone but has an image of the Indian flag on the back. It runs on Android 5.1 Lollipop, has a 4-inch touchscreen with 960x640 resolution, a removable 1450mAh battery, and a 3.2-megapixel main camera.

The phone is powered by a 1.3GHz quad-core processor and 1GB of RAM, and has 8GB of internal storage, expandable with a MicroSD card. It doesn't have 4G or LTE capabilities, an accelerometer or NFC.

Some analysts say there is no way the company can sustain profits by selling the phone, as the MicroSD alone would cost more than the phone itself.

Ashok Chadha, Ringing Bells president, says costs will be kept down through "economies of scale," tax breaks for local manufacturing, and other measures.

"We are technocrats and have some understanding of international economics," he said to the Wall Street Journal.

Initial demand for the phone was significant, to the point that the company's website crashed a few hours after it was made available. In a notice to customers, the company said it was receiving 600,000 hits a second on its website and would stop taking orders until the site was back up and running.

Ringing Bells was set up in September 2015 and began selling mobile phones on its website at the beginning of this year.

Last year, India surpassed the US as the world's largest smartphone market after China, and with the Freedom 251 device Ringing Bells says it aims to produce hundreds of thousands of phones a month and take 30% of the smartphone market within a year.