Pushing $40 smartphones is getting more attention, but it’s also running into problems

The push for a coalition of telecom operators, equipment manufacturers, and industry groups to bring $40 phones to the market – a price that seems to be the key to getting millions of people online – is growing, but questions remain about whether manufacturers can make such low-cost devices.

This week at the Mobile World Congress in Barcelona, ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ he said is working with major African mobile operators – including Airtel, Axian Telecom, Ethio Telecom, MTN Group, Orange, and Vodafone – and mobile phone manufacturers to test low-cost 4G devices in six African markets: Democratic Republic of the Congo, Ethiopia, Nigeria, Rwanda, Tanzania, and Uganda, with the goal of making mobile phones affordable and bringing an additional 20 million people online.

Low-cost mobile phones are seen as the key to bridging the digital divide in emerging markets, where millions of people live within the confines of a mobile phone but don’t have access to the internet, often because access to the internet is too expensive. Through his own Handset Affordability CoalitionThe GSMA is working with operators and manufacturers to promote devices worth about $40 to help close this gap.

The project is still in its early stages, with trade negotiations between mobile operators and mobile manufacturers to produce devices that meet the expected prices.

The GSMA has been working with more than 15 mobile phone manufacturers as part of the project, with seven companies expressing interest in supporting the project, Alix Jagueneau, head of the group’s international affairs, told TechCrunch.

“The price of $ 30-$ 40 is an aspiration, based on the GSMA’s intellectual research on affordability and should be understood as a great effort,” said Jagueneau, adding that the high cost of memory adds urgency and difficulty to the effort.

The final cost of such equipment will depend on several factors, including monetary policy and tax policies, Jagueneau told TechCrunch. Development banks, donors, and other financial institutions can help reduce the risk of mobile operators investing in these devices. At the same time, taxes and duties on cell phones — which are sometimes considered luxury goods — can add 30% to cell phone prices in some markets, Jagueneau said.

The GSMA has not confirmed the manufacturers of the devices, Jagueneau says commercial negotiations with smartphone manufacturers are still ongoing. However, the team hopes that the first proof-of-concept devices can be developed this year, while the first consumer offerings could reach the market by the end of 2026.

None of the six countries that have been identified in the pilot program have committed to reduce the tax or taxes on mobile phones, said Mr. Jagueneau, adding that the group is working with officials to develop ongoing discussions with governments in the coming months.

“We believe it’s important for government agencies to address this part of the equation for digital inclusion,” Jagueneau said. He said the group approved South Africa’s removal last year of a 9% excise tax on mobile phones priced below R2,500 (about $150), saying more countries should do the same.

Thinner streams and higher commodity prices

Experts say the industry may struggle to produce smartphones near the $40 price tag at current prices.

“Pushing premium phones at a price of $30-$40 would have been possible earlier when memory costs were very low,” said Ahmad Shehab, an analyst at Counterpoint Research.

Devices at this price point may come with a lower price point and lower profit margins, Shehab told TechCrunch, adding that finding lower-memory devices may also be difficult as vendors prioritize larger chips.

The average selling price of mobile phones in the Middle East and Africa, on Counterpoint, stood at about $188 in the fourth quarter of 2025, showing the difference between current market prices and the level of $40.

“Although several brands have achieved ASPs below $40, the volume of these sales remains negligible and is virtually non-existent for major retailers worldwide,” said Shehab.

Attempts to bring affordable smartphones to emerging markets have faced challenges in the past. In 2014, Google he started of Android One promoting low-cost smartphones in markets including India, Pakistan, Bangladesh, and Indonesia in the past expanding the program to Africa in 2015. However, that they fought for universal adoption.

Google continued the program in other markets for several years, including Japan, but it never became a major platform for entry-level smartphones.

Mr. Jagueneau said the effort may require a concerted effort by operators, manufacturers, and governments, but added that improving access to affordable phones remains critical to getting more people online.