Push for $40 smartphones builds momentum, however nonetheless faces value hurdles

A push by a coalition of telecom operators, gadget makers, and business teams to carry $40 smartphones to market — a worth level seen as key to getting tens of tens of millions extra folks on-line — is gathering momentum, however questions stay over whether or not producers can produce such ultra-low-cost units at scale.

This week at Cellular World Congress in Barcelona, the advocacy and lobbying group GSMA said it’s working with main African cell operators — together with Airtel, Axian Telecom, Ethio Telecom, MTN Group, Orange, and Vodafone — and smartphone makers to pilot ultra-low-cost 4G units in six African markets: the Democratic Republic of the Congo, Ethiopia, Nigeria, Rwanda, Tanzania, and Uganda, in a bid to make smartphones extra reasonably priced and convey an extra 20 million folks on-line.

Inexpensive smartphones are extensively seen as key to narrowing the digital divide in creating markets, the place tens of millions of individuals stay inside cell broadband protection however stay offline, actually because internet-enabled units stay too costly. Via its Handset Affordability Coalition, the GSMA is working with operators and producers to advertise units priced round $40 to assist shut that hole.

The initiative stays in early levels, with industrial negotiations underway between cell operators and smartphone producers to develop units assembly the focused worth vary.

The GSMA has engaged with greater than 15 smartphone producers as a part of the trouble, with seven firms expressing curiosity in supporting the initiative, Alix Jagueneau, the group’s head of exterior affairs, advised TechCrunch.

“The $30–$40 worth level is an ambition, based mostly on GSMA intelligence analysis on affordability and is to be understood as a greatest effort intent,” Jagueneau stated, including that rising reminiscence prices are including urgency and complexity to the trouble.

The ultimate worth of such units will rely upon a mixture of things, together with financing schemes and tax insurance policies, Jagueneau advised TechCrunch. Growth banks, donors, and different monetary establishments may assist scale back dangers for cell operators investing within the units. On the identical time, import duties and taxes on smartphones — generally handled as luxurious gadgets — can add as a lot as 30% to handset costs in some markets, Jagueneau stated.

The GSMA has not confirmed which producers will produce the units, with Jagueneau saying industrial discussions with smartphone makers are nonetheless ongoing. Nevertheless, the group hopes preliminary proof-of-concept units might be produced this 12 months, with early shopper choices probably reaching markets by late 2026.

Not one of the six international locations recognized for the pilot program has but dedicated to decreasing import duties or taxes on entry-level smartphones, Jagueneau stated, including that the group is working with operators to construct an ongoing dialogue with governments within the coming months.

“We consider there’s an urgency for the general public sector to deal with this a part of the equation for digital inclusion functions,” Jagueneau stated. She added that the group welcomed South Africa’s removing final 12 months of a 9% luxurious excise obligation on smartphones priced beneath R2,500 (round $150), saying extra international locations ought to take related steps.

Skinny margins and rising element prices

Analysts say the business could battle to provide smartphones close to the $40 worth level beneath present element value situations.

“Pushing smartphones priced within the $30–$40 vary may have been traditionally possible when reminiscence prices had been considerably decrease,” stated Ahmad Shehab, analysis analyst at Counterpoint Analysis.

Gadgets at that worth would probably include extraordinarily primary specs and skinny revenue margins, Shehab advised TechCrunch, including that securing low-capacity reminiscence elements can be tough as suppliers more and more prioritize higher-capacity chips.

The common promoting worth of smartphones within the Center East and Africa, per Counterpoint, stood at about $188 within the fourth quarter of 2025, highlighting the hole between present market costs and the focused $40 degree.

“Though a couple of manufacturers have achieved ASP ranges beneath $40, these gross sales volumes stay negligible and are largely absent from main international distributors,” Shehab stated.

Makes an attempt to carry ultra-low-cost smartphones to rising markets have confronted challenges earlier than. In 2014, Google launched the Android One initiative to advertise reasonably priced smartphones in markets together with India, Pakistan, Bangladesh, and Indonesia earlier than increasing this system to Africa in 2015. Nevertheless, it struggled to achieve widespread adoption.

Google continued this system in some markets for a number of years, together with Japan, but it surely by no means grew to become a dominant platform for entry-level smartphones.

Jagueneau stated the trouble would require coordinated motion throughout operators, producers, and governments, however added that enhancing entry to reasonably priced smartphones stays important to bringing extra folks on-line.