Push for $40 smartphones builds momentum, but still faces cost hurdles

A coalition of telecom companies, device manufacturers, and industry organizations is intensifying efforts to launch $40 smartphones, which are considered crucial for connecting millions more individuals to the internet. Despite growing momentum, concerns linger about the feasibility of mass-producing such low-cost devices. At the recent Mobile World Congress in Barcelona, the GSMA, an advocacy group, announced its collaboration with prominent African mobile operators, including Airtel, Axian Telecom, Ethio Telecom, MTN Group, Orange, and Vodafone. The initiative aims to pilot affordable 4G smartphones in six African nations: the Democratic Republic of the Congo, Ethiopia, Nigeria, Rwanda, Tanzania, and Uganda. The goal is to make smartphones accessible to an additional 20 million people, thereby narrowing the digital divide in regions where many have mobile broadband access but lack internet-enabled devices due to high costs. The GSMA's Handset Affordability Coalition is actively pushing for the development of smartphones priced around $40 to help bridge this gap. Currently, the initiative is in its early stages, with ongoing commercial negotiations between mobile operators and manufacturers to create devices that meet this price target. Alix Jagueneau, the GSMA’s head of external affairs, indicated that over 15 smartphone manufacturers are engaged in discussions, with seven showing interest in supporting the initiative. Jagueneau emphasized that the $30 to $40 target price is ambitious, based on research into affordability, and is intended as a guiding principle rather than a guarantee. Rising memory costs are complicating the situation, making it urgent for stakeholders to find solutions. The final pricing of these devices will be influenced by various factors, including financing options and tax regulations. Development banks and financial institutions may play a crucial role in reducing risks for mobile operators looking to invest in these low-cost devices. However, import duties and taxes on smartphones, often regarded as luxury items in some regions, can inflate prices by as much as 30%. As of now, no commitments have been made by the six pilot countries to lower these import taxes, although Jagueneau noted that the GSMA is fostering ongoing discussions with governments. There is a pressing need for the public sector to engage in this dialogue for the sake of digital inclusion, according to Jagueneau. She also praised South Africa's recent decision to eliminate a 9% luxury tax on smartphones priced below R2,500 (approximately $150) and encouraged other nations to follow suit. Experts caution that reaching the $40 price point may prove challenging under current component costs. Ahmad Shehab, a research analyst from Counterpoint Research, explained that producing smartphones at this price would require basic specifications and minimal profit margins. Moreover, obtaining low-capacity memory components is becoming increasingly difficult as suppliers focus on higher-capacity chips. The average selling price of smartphones in the Middle East and Africa reached about $188 in the fourth quarter of 2025, highlighting the significant disparity between current prices and the ambitious $40 target. Although some brands have recorded sales below this threshold, they account for negligible volumes and are absent from major global vendors. Previous attempts to introduce ultra-low-cost smartphones to emerging markets have encountered obstacles. For instance, Google’s Android One initiative aimed to promote affordable smartphones in various countries starting in 2014 but struggled to gain widespread traction. While the program persisted in some regions, it never became the leading platform for entry-level devices. Jagueneau concluded that achieving meaningful progress toward affordable smartphone access requires coordinated action among operators, manufacturers, and governments, underscoring the critical role of affordable devices in bringing more people online.