Make in India costs more than made in China: Aakash tablet maker
Questioning the feasibility of Freedom 251, Datawind CEO Suneet Singh Tuli trashed the explanation given by Noida-based startup Ringing Bells that domestic manufacturing have allowed them to offer the world’s cheapest smartphone for just Rs 251 or less than $4.
在责疑’自由251’的可行性时，’数据风’公司总裁突里鞭斥了设在诺伊达的创业公司’响铃’给出的解释 – 本国生产允许他们提供全世界最便宜的智能手机，只要251卢比，或者说低于4美元。
“Firstly, make in India is actually assemble in India. While local assembling is the first step towards local manufacturing, it is impossible to have such a huge impact on the bill of materials,” Tuli said.
Ringing Bells president Ashok Chadha in an interview with The Times of India said that the company would not only sell the smartphone for Rs 251 but also make a profit of Rs 31 from each unit. Chadha primarily stressed that “economies of scale, domestic manufacturing and online sales without much marketing expenses” is allowing them to deliver the world’s cheapest smartphone.
It is questionable as to what impact does online sales and marketing have on the actual cost of components or the total bill of materials.
During the launch, Chadha while justifying the price of Freedom 251 said, “The cost of making one unit of the smartphone is around Rs 2,000. By making in India, this price goes down by Rs 400. Then we will sell online only. So, this pulls down the price by Rs 400 further. We are sure that this smartphone will be in a lot of demand. We are assuming to save around Rs 500 from this economy of scale. At last, we wait for our platform to grow, so, that we can make money from other services.”
In reply to this, Tuli said, “To take advantage of economies of scale, Ringing Bells has to be of the likes of Samsung in the market. The promise of just delivering 25 lakh units online and another 25 lakh units offline is not that big to have such a drastic impact on the making costs. Also, it is absurd to hear that online sales will have an impact on the bill of materials.”
Commenting on the ‘make in India’ advantage, Tuli said, “In reality, make in India costs more than made in China. Local assembly simply provides some duty benefits. However, in no way can it help Ringing Bells reduce the cost by around Rs 400 per unit for a Rs 2,000 smartphone.”
Amidst all apprehension, the Aakash maker summarised the entire hype around Freedom 251 by saying, “Freedom 251 is just a marketing promotion of an existing Chinese product already being sold in Nehru Place (in New Delhi). It is impossible. The price of 1GB RAM and 8GB ROM is more than the price of the device. There is no innovation but do expect surprises soon.”
纷纷疑虑中，’天空’（平板电脑）制造商对围绕’自由251’的所有大话做了如下总结，“自由251仅仅是对一个现有的、已经在尼赫鲁广场（在新德里）出售的中国产品的市场推销。那是不可能做到的。1GB RAM和8GB ROM的价格已经比这装置的价格高了。不具创意，却盼着一鸣惊人。”
Tuli may right on his view. May be the application installed in this device may bring some additional revenue to the Ringing bells.
What application installed on that mobile will bring in revenues?
‘Make In INDIA costs more than Made In China’ This is so true because of corrupt, lazy govt officials and corrupt politicians. Indian govt interested in sucking money only from middle class and giving freebies to (so called) poor and heavy loans to rich which in turn would be defaulted.
‘印度制造’ 的成本高于 ‘中国制造’。因为腐败、懒散的政府官员和腐败的政客，这话讲得太对了。印度政府感兴趣的是吸榨中产阶层钱财、给（所谓的）穷人免费物品，还有，给富人巨额贷款，这随后就会变成坏帐。
Of course it will be expensive as compared to China because they already have technology to handle the operations efficiently and already has much more better infrastructure for everything as compared to India. China has started making many things automatised which will increase efficiency and lower down the overall cost. This is the area where India lags by miles. So, Make In India will be more expensive than Made In China.
Yes Umesh Totally agree to you , But somewhere even china also has started with the same or worst infra then india , they grew and reach to the level where they are today .. There are many obstacles and challenges for Make In India but , we need to start , right ? I m not sure about this freedom 251 but for other startups , we should promote them , we should be buying looking at MADE IN INDIA rather then MADE in CHINA even with the slightly higher charges. Then only the dream of “Golden BIRD” …
对啊，Umesh，完全同意你的说法。可是，中国也是在同印度一样或者更差的条件下起步、成长並达到他们今天的地步…印度制造有很多障碍和挑战，但是，我们需要起步，对吧？我对这个 ‘自由251’吃不准，但对其它新创企业，我们应该宣扬，我们该看着’印度制造’ 买，而不是中国制造，即便收费稍微高点。…
Is it Chinese dumping idea. Also check the radiation levels. There might be a health risk using this mobile.
Prison labor, piling 10 people in a 10×12 room, working them 16 hours a day, human rights abuse, child labor and no labor unioin makes Chinese manufacturing cheap.
Question is, does India want to follow the salve model?
Tuli needs to wake up and face realities. May be he should read Michael Porter’s Competitive Advantage and get familair with the Five Forces Model; and old framework but still applies to a global competitive market.
Made in China is cheap but low quality. Let us make in India little bit cost but durable quality wise.