4G Smartphone Priced at Rp500,000 Set to Launch This Year
The global telecommunications industry association (GSMA) is developing 4G smartphones priced at approximately Rp500,000 for sale in six African nations. The devices are being developed jointly with smartphone manufacturers and telecommunications operators.
Alix Jagueneau from GSMA stated that seven of fifteen smartphone manufacturers contacted by GSMA have expressed interest in participating in the development of the affordable device.
“The target price of US$30 (Rp500,000) to US$40 (Rp700,000) is the ambition, based on GSMA research on price affordability and best efforts,” he told Tech Crunch.
However, efforts to achieve the target price are becoming increasingly complicated due to soaring memory costs.
Additionally, the final smartphone price also depends on tax regulations and financial industry support. Banks and donor institutions could help telecommunications operators reduce their investment risks.
Furthermore, affordable prices can only be achieved through tax incentives. In some countries, smartphones are still classified as luxury goods and subject to high taxes of up to 30 per cent.
Telecommunications operators that have partnered with GSMA include Airtel, Axian Telecom, Ethio Telecom, MTN Group, Orange, and Vodafone. The target markets for now are the Democratic Republic of Congo, Ethiopia, Nigeria, Rwanda, Tanzania, and Uganda.
Through this initiative, GSMA aims to open internet access to 20 million people. The plan is for device prototypes to be available soon, with sales potentially beginning by late 2026.
The problem is that to date, no country has committed to reducing import tariffs for the affordable smartphones.
Ahmed Shebab from Counterpoint is sceptical that the target price can be achieved at current component costs.
“A smartphone priced at US$30 to US$40 could be achieved when memory costs were much lower,” he said. “Although some brands can reach that price point, their volumes are not large and they are not on the product lists of globally scaled brands.”
Shebab explained that the average smartphone price in the Middle East and Africa region is US$188 (Rp3.2 million). Development of smartphones below that price is also hampered by supply chain issues. Semiconductor manufacturers, including both GPU and memory producers, are now prioritising the production of higher-priced chips with better margins.
Previous efforts to produce affordable smartphones were undertaken by Google through its launch of Android One in 2014. Android One was launched in India, Pakistan, Bangladesh, and Indonesia in 2014. However, Android One failed to capture significant market share.