There is a link in the comments to a 7 dollar phone that looks way more polished. Crazy really, a fast food meal will cost you more than that here in Canada.
Mediatek (MTK) was for many years the SoC of choice for ultra-cheap feature phones like these, but they seem to have gone up the scale (their Android platforms are good value) while others like RDA have filled in the ultra-low-end.
I think one of the ways in which they were able to undercut MTK was to use a different CPU core - the $2 MT6250 in bunnie's phone still uses an ARM core, which means licensing fees to ARM are some part of the cost (I'm not aware of any "pirated" ARM cores) - and in such a cheap SoC, could be a significant fraction. The RDA8851 is "MIPS-compatible" so they aren't paying ARM and likely the other IP on it was either designed by RDA or others in China.
With such capabilities it's pretty weird that such companies aren't fiercely competing in the mcu market(at least in the high end of it). They could have made a killer mcu for very cheap.
Tracfones are subsidized though, they give them away for almost nothing because people buy minutes for them, and they're almost useless without minutes unless you just want it to call 911.
I think one of the ways in which they were able to undercut MTK was to use a different CPU core - the $2 MT6250 in bunnie's phone still uses an ARM core, which means licensing fees to ARM are some part of the cost (I'm not aware of any "pirated" ARM cores) - and in such a cheap SoC, could be a significant fraction. The RDA8851 is "MIPS-compatible" so they aren't paying ARM and likely the other IP on it was either designed by RDA or others in China.