A coalition of carriers, device manufacturers and industry groups is gaining momentum to bring a $40 smartphone to market. That price point is seen as key to getting tens of millions more people online, but questions still remain about whether manufacturers can produce these ultra-low-cost devices at scale.
At this week’s Mobile World Congress in Barcelona, GSMA teamed up with leading African mobile carriers and smartphone manufacturers, including Airtel, Axian Telecom, Ethio Telecom, MTN Group, Orange and Vodafone, to offer ultra-low-cost smartphones in six African markets – Democratic Republic of the Congo, Ethiopia, Nigeria, Rwanda, Tanzania and Uganda. They announced that they plan to pilot 4G devices. People online.
Affordable smartphones are widely seen as the key to closing the digital divide in developing countries, where millions of people live within mobile broadband coverage but remain offline because internet-enabled devices are often too expensive. GSMA, through the Handset Affordability Coalition, is working with carriers and manufacturers to promote devices priced around $40 to bridge this gap.
The plan is still in its early stages, with commercial negotiations underway between carriers and smartphone manufacturers to develop devices that meet the target price range.
GSMA has partnered with more than 15 smartphone manufacturers as part of this effort, and seven companies have expressed interest in supporting the initiative, Alix Jagueneau, the group’s head of external affairs, told TechCrunch.
“The $30-$40 price range is an ambitious target based on GSMA Intelligence research on affordability and should be understood as a best-effort intent,” Jagueneau said. He added that rising memory costs are adding urgency and complexity to this effort.
The final price of these devices will depend on a combination of factors, including financing plans and tax policies, Jagueneau told TechCrunch. Development banks, donors and other financial institutions can help reduce risks for mobile operators investing in the devices. At the same time, import duties and taxes on smartphones, sometimes considered luxury goods, can add up to 30% to the price of a phone in some markets, Jagueneau said.
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The GSMA has not confirmed which manufacturer will produce the device, and Jagueneau said commercial discussions with smartphone manufacturers are still ongoing. However, the group hopes that initial proof-of-concept devices could be produced this year and that initial consumer products could be on the market by the end of 2026.
Jagueneau said none of the six countries identified for the pilot program have yet committed to lowering import duties or taxes on entry-level smartphones, adding that the group is working with telcos to establish ongoing dialogue with governments in the coming months.
“We believe it is urgent for the public sector to address this part of the equation for digital inclusion purposes,” Jagueneau said. She welcomed South Africa’s removal of the 9% luxury consumption tax on smartphones under 2,500 rand (about $150) last year, adding that more countries should take similar measures.
Low margins and rising component costs
Analysts say the industry may struggle to produce smartphones near the $40 price point given the current component costs.
“Pushing smartphones in the $30 to $40 range would have historically been possible when memory costs were fairly low,” said Ahmad Shehab, a research analyst at Counterpoint Research.
Shehab told TechCrunch that devices at that price are likely to offer extremely basic specs and low profit margins, adding that it may also be difficult to secure low-capacity memory components as suppliers increasingly prioritize higher-capacity chips.
According to Counterpoint, the average selling price of a smartphone in the Middle East and Africa was around $188 in the fourth quarter of 2025, highlighting the gap between current market prices and the target $40 level.
“While some brands have achieved ASP levels below $40, these sales volumes are still minuscule and virtually non-existent for major global suppliers,” Shehab said.
Attempts to bring ultra-low-cost smartphones to emerging markets have faced challenges before. Google launched the Android One initiative in 2014 to promote affordable smartphones in markets such as India, Pakistan, Bangladesh and Indonesia, before expanding the program to Africa in 2015. However, it has struggled to achieve widespread adoption.
Google continued the program for several years in some markets, including Japan, but it never became the dominant platform for entry-level smartphones.
Jagueneau added that this will require coordinated action between carriers, manufacturers and governments, but improving access to affordable smartphones remains critical to getting more people online.
