Coalition Advances $40 Smartphone Initiative Despite Manufacturing Cost Challenges

An ambitious campaign led by telecommunications companies, device manufacturers, and industry organizations aims to develop smartphones priced at $40 to expand internet access for millions of people. While the initiative gains traction, significant questions persist about the feasibility of mass-producing such affordable devices.

During this week’s Mobile World Congress in Barcelona, the GSMA announced its collaboration with prominent African telecommunications providers including Airtel, Axian Telecom, Ethio Telecom, MTN Group, Orange, and Vodafone. The partnership focuses on testing extremely affordable 4G smartphones across six African nations: Democratic Republic of the Congo, Ethiopia, Nigeria, Rwanda, Tanzania, and Uganda. The goal is to connect an additional 20 million individuals to the internet.

Industry experts recognize affordable mobile devices as crucial for bridging the digital gap in emerging economies. Millions of people in these regions have access to mobile broadband infrastructure but remain disconnected due to prohibitively expensive internet-capable phones. The GSMA’s Handset Affordability Coalition coordinates efforts between network operators and manufacturers to develop devices around the $40 price range.

The project remains in preliminary phases, with ongoing commercial discussions between mobile carriers and smartphone producers to create devices within the target cost bracket. According to Alix Jagueneau, GSMA’s head of external affairs, the organization has engaged over 15 smartphone manufacturers, with seven companies showing interest in supporting the program.

Jagueneau emphasized that the $30-$40 price target represents an aspirational goal based on GSMA research regarding affordability. She noted that increasing memory costs add both urgency and complexity to achieving this objective. The final device pricing will depend on various elements including financing arrangements and tax policies.

Financial institutions, development banks, and donors could potentially help reduce investment risks for mobile operators. Additionally, import duties and taxes on smartphones, sometimes classified as luxury goods, can increase handset prices by up to 30% in certain markets, according to Jagueneau.

While the GSMA has not disclosed which manufacturers will produce these devices, Jagueneau indicated that commercial negotiations with smartphone makers continue. The organization anticipates initial prototype devices could be manufactured this year, with early consumer products potentially reaching markets by late 2026.

None of the six pilot countries have committed to reducing import duties or taxes on entry-level smartphones. The GSMA plans to work with operators to establish ongoing discussions with governments in the coming months. Jagueneau stressed the urgency for public sector involvement in addressing this aspect of digital inclusion.

The organization praised South Africa’s decision last year to eliminate a 9% luxury excise duty on smartphones priced below R2,500 (approximately $150), encouraging other nations to implement similar measures.

Industry analysts express skepticism about producing smartphones near the $40 price point under current component cost conditions. Ahmad Shehab, a research analyst at Counterpoint Research, noted that such pricing might have been historically possible when memory costs were substantially lower.

Devices at this price would likely feature extremely basic specifications and minimal profit margins, Shehab explained. Securing low-capacity memory components also presents challenges as suppliers increasingly focus on higher-capacity chips.

Counterpoint data shows the average selling price of smartphones in the Middle East and Africa reached approximately $188 in the fourth quarter of 2025, highlighting the substantial gap between current market prices and the $40 target. While some brands have achieved selling prices below $40, these represent negligible sales volumes and are largely absent from major global vendors.

Ramazan Yavuz, EMEA director at IDC, described initiatives targeting $30-$40 smartphones as overly ambitious given current smartphone market challenges. Feature phones, typically priced between $10 and $15, remain the primary alternative for many African consumers, representing 39.5% of all mobile phones shipped in Africa during 2025.

Previous attempts to introduce ultra-low-cost smartphones to emerging markets have encountered obstacles. Google launched the Android One initiative in 2014 to promote affordable smartphones in markets including India, Pakistan, Bangladesh, and Indonesia, later expanding to Africa in 2015. However, the program struggled to achieve widespread adoption and never became a dominant platform for entry-level smartphones.

Despite these challenges, Jagueneau emphasized that the current effort requires coordinated action across operators, manufacturers, and governments. She maintained that improving access to affordable smartphones remains essential for expanding internet connectivity globally.