Common knowledge says that if a deal seems too good to be true, it probably isn’t. We saw that with Freedom 251 – the smartphone priced at Rs 251, made by an obscure Noida-based company called Ringing Bells. While the jury is still out on whether it’s a scam or the real deal, another desi contender boarded the bus – Docoss X1 with its price tag of Rs 888 by a company called Docoss Multimedia in Jaipur.

Both companies offer similar specifications, which are nothing to boast about but they could prompt non-phone users or feature phone users to cross over to smartphone territory. But even for that target audience, is a phone like Docoss X1 enough? Tarun Pathak, Senior Analyst with Counterpoint Research tells Tech2, “I think the big disconnect here is inability to understand the diverse set of end users and their needs, which are more inclined towards “value for money” instead of “cheap”. The industry has many examples of companies that have expended huge amounts of time and money chasing the notion of the lowest cost smartphone without success – for example Mozilla’s Firefox strategy for smartphones.”

Pathak agrees that a massive shift in India is happening from feature phones to smartphones. “But that shift brings with it a level of expectation – expectation of consuming content, expectation of watching videos and listening to music and hence drives the need for decent hardware performance. To accommodate these requirements, the industry has reached a certain level of price point — currently $50-$60. Packing something similar in a $12 product is not possible now,” reasons Pathak.

Pathak also adds that it could, in fact, prove to be a dis-service to the smartphone segment, rather than bringing people on to the smartphone platform, as there is a high chance that target users shift back to feature phones after a horrible first time smartphone experience!

Taking a step back and looking at the bigger picture, does this mean that mainstream players like Samsung and HTC will have to re-think their entry-level smartphone pricing for the Indian market? Highly unlikely, Arpita Pal Agrawal, Partner, PwC India tells Tech2. She feels they would like to wait and watch before making any pricing decisions.

Speaking on the same lines, Pathak says, “The decline in ASP (Average Selling Price) doesn’t alter the strategies of Tier I players like Samsung and HTC which are now in pursuit of better margins than just volumes.”