Entry-level smartphones are already cheap, but chip maker ARM believes basic smartphone prices will hit a new (non-subsidized) low of $20 in the next few months. For that price, a phone wouldn't be particularly fancy by today's standards—hence the term 'entry-level'—but it will be a basic and usable Android device.
ARM says that before 2014 is out we'll see $20 Android smartphones. These devices will be rocking a single core Cortex A5 chip and connecting to 2.5G (pre-3G) networks, according to a report by AnandTech from ARM's Tech Day in Austin.
As those limited specs might suggest, mega-cheap $20 smartphones probably won't appear stateside. Instead, like the first Firefox OS handsets that debuted in 2013, $20 Android phones would be primarily designed for emerging markets where people can't afford higher end flagship phones.
That's not to say a $20 Android phone couldn't land in the U.S., but it's very unlikely. The U.S. is already chock full of bargain basement phones that offer far more than a 2.5G Android phone.
On AT&T Go, the carrier's contract-free, prepaid service, you can get a refurbished Nokia Lumia 520 for $40. Then there's the standard two-year subsidized carrier contracts where you can get all kinds of free phones including the Galaxy S3, iPhone 4S, BlackBerry Z10, and the LG G2.
The one advantage of a $20 Android phone is that it would be sold off contract and probably unlocked. Cheap Go phones and two-year contract freebies don't come unlocked, although you can get your carrier to unlock it for you.
Even if a $20 smartphone fails to land in the U.S. in 2014, cheaper entry-level phones could drive prices down for handsets upstream, most likely with mid-range devices. High end flagship phones are unlikely to drop in price any time soon, since companies spend money on creating advanced features for these devices, as well as employing newer components such as better resolution displays and faster processors.