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The cost of smartphones falls, but they remain unaffordable for billions around the world

Web Foundation · August 31, 2022

Of all the devices available with internet capability, smartphones are generally the least expensive with characteristics that offer more than a basic connectivity. Because of this, they serve an important role in providing people with meaningful connectivity – a crucial element in the development of digital economies. A4AI has set smartphone ownership as one of the four targets of Meaningful Connectivity, as an entry point for people to  experience the full power of the internet. 

In September 2021, A4AI conducted a survey with 9,000 people across nine low-and middle-income countries to measure meaningful connectivity. This survey confirmed that smartphones are valuable tools when it comes to ensuring internet access.  In comparison to more basic internet-capable phones, smartphone users reported more frequently having looked for a job online, taken a class, and bought something online. 

2.5 billion people still pay more than 30% of their monthly income to purchase the cheapest smartphone available in their markets.

Smartphones enable digital participation – but they remain unaffordable for many around the world and specially in low and middle income countries. For 2.5 billion people worldwide, buying the cheapest available smartphones would cost more than 30% of their monthly income. Although the cost of a smartphone (expressed as a percentage of average monthly income) dropped 2 percentage points between 2021 and 2022, they remain unaffordable for many people, especially women and people living in rural areas. Making matters worse, in some regions smartphones actually became even more unaffordable over the last year. On average, the cost of the cheapest available smartphones in South Asia increased over 20% between 2021 and 2022.

Although our data cannot fully explain why levels of affordability range so greatly – one reason could be the different types of smartphones available per country – the results strongly indicate that incomes alone are not behind these contrasts. When expressed as a share of income, any good with a fixed cost should become easier to afford as incomes rise. Despite this, our analysis indicates that levels of smartphone affordability ranges dramatically among countries with comparable incomes. For example, both Mozambique and Madagascar are low-income countries. However, when expressed as a share of income, the average person would have to spend 3 times as much to afford a smartphone in Madagascar as in Mozambique. In Zambia, at a cost of 23% of monthly income, the level of smartphone affordability is just above the global affordability average of 20% and comparable to the levels of affordability found in Turkey and Belarus, two upper-middle income countries. 

Similar patterns can be found among low middle-income countries. In 8 of the 37 lower middle-income countries included in our data, smartphones are more affordable than the global average and smartphone affordability in these countries reaches as low as 9% in El Salvador.

Targets and actions around smartphone affordability

Our analysis also demonstrates that providing affordable smartphones is not a luxury that only high-income countries can afford. Instead, low-income countries can and, in a number of cases, already do, offer cheaper smartphones that more people can afford.

At present, countries are not doing enough to better understand what can be done to improve smartphone affordability. Every two years A4AI conducts a policy survey in 72 countries to assess the policy environment of their ICT sector. These surveys provide insights that allow A4AI to better understand whether and how governments are working to improve the affordability of the internet and identify what works and what doesn’t. In our last policy survey in 2020, 50 out of 72 countries surveyed did not include a target in their national broadband plans or ICT strategies that related to the availability and/or affordability of internet-enabled devices. This speaks to the lack of attention ICT ministries have paid to creating strategies to ensure greater access to devices such as smartphones that allow users to connect to the internet.

We know improvement is possible, but there must be action from different stakeholders for it to happen. A concrete action that governments can take to change this reality and start paying attention to this issue will be to include targets in national broadband plans and ICT strategies around smartphone affordability. The private sector, civil society, and international aid organizations should follow with innovative ways of financing smartphones and closing the gap in smartphone ownership. Subsidies and payment options should be alternatives considered by actors in the sector to provide smartphones where people have never had one, mainly in rural areas and to women and girls. 

If more people around the world, and especially where it is less common, in LDCs, Sub-Saharan Africa and South Asia, had access to smartphones these economies could see a boost in their economic growth. There will be more users, such as an entrepreneur in Ghana that reported receiving and making payments for her business online through her phone, and another one in Lagos that reported running a part of her hairdresser business from her mobile phone. Once connected through a smartphone the possibilities of running a business online, selling and buying things, accessing jobs that were previously inaccessible, learning from others, and accessing telehealthcare become possible. 

Smartphone ownership might be one part of the meaningful connectivity story, but the potential impact of these small devices on access to an inclusive digital economy should not be ignored. 

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