Freedom 251, the cheapest smartphone on the market at INR 251 (as the name suggests) or approximately $4, begins shipping out 200,000 pieces on 30th June to customers in India.

The Android 5.1 device, with a 4″ 540 x 960 resolution screen, 1GB RAM and 8GB expandable storage is powered by a quad-core 1.3GHz CPU under the hood. The device also boasts a 3.2MP selfie camera and a 8MP rear shooter. The specs of the Freedom 251 are in line with flagship devices that were launched 3-4 years back, so it’s a wonder how the company could turn a profit at such a low selling point. Well, Ringing Bells, the company behind the Freedom 251, claims that they make a loss on every device sold.

This business strategy is similar to that of Amazon back when it launched the Kindle Fire tablet. Amazon had predicted that the sales of the apps, content, and cloud-based services would be their main source of revenue and was thus willing to make an initial loss on each device sold — a gambit that played-off in their favour.

For India, and in the case of the Freedom 251, the situation is albeit different; the low spec device’s main selling point is the cost. The INR 251 pricing seems affordable to most until you consider India’s low per-capita income of $1,500 and the fact that it is still the second largest mobile market in the world. Having a cheap device, priced extremely competitively, not only help Ringing Bells cement a name for themselves but they can also tap into a large mobile market where 75% of devices retailed per year are priced below $150.