A $40 smartphone is not the biggest thing we've heard in this market this year, we already have Kshs 4000 smartphones in this market running Android. Even lower, since the $30 Firefox smartphone sold in Kenya a while back.
What is interesting is that the device promises a quite good experience at that price.
If you look at the specs sheet you will see that it looks quite good for that price. 5.5 inch display is something unheard of at that price, we almost always get 4 inch smartphones that are a struggle to use because the display is first almost resistive, we already got used to large screens, so it's really some work to type on them.
Secondly there is stock Android by Google, to ensure the device comes running the most recent Android version, plus security updates. Internal storage is 8GB, not 4GB, so users can actually install apps outside of WhatsApp.
Google did try things with Android One sometime back, but the price points for devices were a bit higher, and the project seems to have been on it's death bed for a while now, with no word from Google about it.