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

A propulsion by a conjugation of telecom operators, instrumentality makers, and manufacture groups to bring $40 smartphones to marketplace — a terms constituent seen arsenic cardinal to getting tens of millions much radical online — is gathering momentum, but questions stay implicit whether manufacturers tin nutrient specified ultra-low-cost devices astatine scale.

This week astatine Mobile World Congress successful Barcelona, the advocacy and lobbying radical GSMA said it is moving with large African mobile operators — including Airtel, Axian Telecom, Ethio Telecom, MTN Group, Orange, and Vodafone — and smartphone makers to aviator ultra-low-cost 4G devices successful six African markets: the Democratic Republic of the Congo, Ethiopia, Nigeria, Rwanda, Tanzania, and Uganda, successful a bid to marque smartphones much affordable and bring an further 20 cardinal radical online.

Affordable smartphones are wide seen arsenic cardinal to narrowing the integer disagreement successful processing markets, wherever millions of radical unrecorded wrong mobile broadband sum but stay offline, often due to the fact that internet-enabled devices stay excessively expensive. Through its Handset Affordability Coalition, the GSMA is moving with operators and manufacturers to beforehand devices priced astir $40 to assistance adjacent that gap.

The inaugural remains successful aboriginal stages, with commercialized negotiations underway betwixt mobile operators and smartphone manufacturers to make devices gathering the targeted terms range.

The GSMA has engaged with much than 15 smartphone manufacturers arsenic portion of the effort, with 7 companies expressing involvement successful supporting the initiative, Alix Jagueneau, the group’s caput of outer affairs, told TechCrunch.

“The $30–$40 terms constituent is an ambition, based connected GSMA quality probe connected affordability and is to beryllium understood arsenic a champion effort intent,” Jagueneau said, adding that rising representation costs are adding urgency and complexity to the effort.

The last terms of specified devices volition beryllium connected a operation of factors, including financing schemes and taxation policies, Jagueneau told TechCrunch. Development banks, donors, and different fiscal institutions could assistance trim risks for mobile operators investing successful the devices. At the aforesaid time, import duties and taxes connected smartphones — sometimes treated arsenic luxury items — tin adhd arsenic overmuch arsenic 30% to handset prices successful immoderate markets, Jagueneau said.

The GSMA has not confirmed which manufacturers volition nutrient the devices, with Jagueneau saying commercialized discussions with smartphone makers are inactive ongoing. However, the radical hopes archetypal proof-of-concept devices could beryllium produced this year, with aboriginal user offerings perchance reaching markets by precocious 2026.

None of the six countries identified for the aviator programme has yet committed to reducing import duties oregon taxes connected entry-level smartphones, Jagueneau said, adding that the radical is moving with operators to physique an ongoing dialog with governments successful the coming months.

“We judge determination is an urgency for the nationalist assemblage to code this portion of the equation for integer inclusion purposes,” Jagueneau said. She added that the radical welcomed South Africa’s removal past twelvemonth of a 9% luxury excise work connected smartphones priced beneath R2,500 (around $150), saying much countries should instrumentality akin steps.

Thin margins and rising constituent costs

Analysts accidental the manufacture whitethorn conflict to nutrient smartphones adjacent the $40 terms constituent nether existent constituent outgo conditions.

“Pushing smartphones priced successful the $30–$40 scope could person been historically feasible erstwhile representation costs were importantly lower,” said Ahmad Shehab, probe expert astatine Counterpoint Research.

Devices astatine that terms would apt travel with highly basal specifications and bladed nett margins, Shehab told TechCrunch, adding that securing low-capacity representation components tin besides beryllium hard arsenic suppliers progressively prioritize higher-capacity chips.

The mean selling terms of smartphones successful the Middle East and Africa, per Counterpoint, stood astatine astir $188 successful the 4th fourth of 2025, highlighting the spread betwixt existent marketplace prices and the targeted $40 level.

“Although a fewer brands person achieved ASP levels beneath $40, these income volumes stay negligible and are mostly absent from large planetary vendors,” Shehab said.

Attempts to bring ultra-low-cost smartphones to emerging markets person faced challenges before. In 2014, Google launched the Android One inaugural to beforehand affordable smartphones successful markets including India, Pakistan, Bangladesh, and Indonesia earlier expanding the programme to Africa successful 2015. However, it struggled to execute wide adoption.

Google continued the programme successful immoderate markets for respective years, including Japan, but it ne'er became a ascendant level for entry-level smartphones.

Jagueneau said the effort would necessitate coordinated enactment crossed operators, manufacturers, and governments, but added that improving entree to affordable smartphones remains captious to bringing much radical online.