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

A push by a coalition of telecom operators, device makers, and industry groups to bring $40 smartphones to market — a price point seen as key to getting tens of millions more people online — is gathering momentum, but questions remain over whether manufacturers can produce such ultra-low-cost devices at scale.

This week at Mobile World Congress in Barcelona, the advocacy and lobbying group GSMA said it is working with major African mobile operators — including Airtel, Axian Telecom, Ethio Telecom, MTN Group, Orange, and Vodafone — and smartphone makers to pilot ultra-low-cost 4G devices in six African markets: the Democratic Republic of the Congo, Ethiopia, Nigeria, Rwanda, Tanzania, and Uganda, in a bid to make smartphones more affordable and bring an additional 20 million people online.

Affordable smartphones are widely seen as key to narrowing the digital divide in developing markets, where millions of people live within mobile broadband coverage but remain offline, often because internet-enabled devices remain too expensive. Through its Handset Affordability Coalition, the GSMA is working with operators and manufacturers to promote devices priced around $40 to help close that gap.

The initiative remains in early stages, with commercial negotiations underway between mobile operators and smartphone manufacturers to develop devices meeting the targeted price range.

The GSMA has engaged with more than 15 smartphone manufacturers as part of the effort, with seven companies expressing interest in supporting the initiative, Alix Jagueneau, the group’s head of external affairs, told TechCrunch.

“The $30–$40 price point is an ambition, based on GSMA intelligence research on affordability and is to be understood as a best effort intent,” Jagueneau said, adding that rising memory costs are adding urgency and complexity to the effort.

The final price of such devices will depend on a combination of factors, including financing schemes and tax policies, Jagueneau told TechCrunch. Development banks, donors, and other financial institutions could help reduce risks for mobile operators investing in the devices. At the same time, import duties and taxes on smartphones — sometimes treated as luxury items — can add as much as 30% to handset prices in some markets, Jagueneau said.

The GSMA has not confirmed which manufacturers will produce the devices, with Jagueneau saying commercial discussions with smartphone makers are still ongoing. However, the group hopes initial proof-of-concept devices could be produced this year, with early consumer offerings potentially reaching markets by late 2026.