Stories
GSMA Urges Tax Breaks and Financing as Rising Memory Prices Hinder Smartphone Affordability
- •The GSMA has called for lower taxes, financing schemes, and second-hand devices to drive smartphone adoption amidst surging memory prices.
- •Rising memory costs driven by AI infrastructure and data centers have made the industry's goal of producing $50 smartphones unachievable.
- •India's smartphone market is projected to contract by 12 to 15 percent this year due to higher component prices and delayed consumer upgrades.
- •Around 3.1 billion people globally remain unconnected to mobile internet, with affordability being the primary barrier.
- •The GSMA suggests that financing options and tax reductions on entry-level phones can help bridge the digital divide.
Key Questions Answered
Demand from artificial intelligence infrastructure and data centres is driving up memory prices. This surge has created a supply-demand imbalance, with components increasingly allocated to applications that offer higher commercial returns.
According to IDC's Worldwide Quarterly Mobile Phone Tracker, India's smartphone market is projected to contract by 12 percent to 15 percent this year. This marks the sharpest annual decline for the market since 2019 as consumers delay upgrades or choose cheaper and second-hand devices.
The GSMA is exploring financing schemes to spread handset costs over time, tax reductions on entry-level smartphones, local manufacturing, and the greater use of second-hand devices. These measures aim to help bridge the affordability gap and drive mobile internet adoption in developing economies.
