Billions risk being locked out of the AI revolution due to smartphone costs

Global telecoms industry body GSMA is calling for urgent action to make smartphones more affordable for people living in low- and middle-income countries so that everyone can “benefit from the AI revolution”.

The call to action comes as the organisation launches its State of Mobile Internet Connectivity Report 2026, an annual study of global mobile connectivity.

The report found that while 4.8 billion people now use mobile internet on their own device, 3.4 billion do not, despite 90% of them living within mobile broadband coverage. GSMA refers to this as the “usage gap”.

Growth in the world’s digital population is also slowing, with roughly 160 million new users coming online in 2025, compared with 190 million in 2024.

Commenting on the report, GSMA Director General Vivek Badrinath said: “Artificial intelligence has the potential to improve lives on an unprecedented scale, but AI is meaningless if people cannot get online in the first place.”

“The greatest risk is not simply an AI divide between countries, but between people who can afford to participate in the digital economy and those who cannot.”

GSMA says it is important to “avoid a large portion of the population in emerging economies being completely left out of the digital economy” and is calling for a number of actions.

A growing usage gap

A key factor behind growing global digital inequality, according to the report, is the “sharp increase in the cost of smartphone memory and chipsets, driven by global demand for AI infrastructure and data centres”.

Memory prices have skyrocketed recently, more than doubling between the third quarter of 2025 and the first quarter of 2026, followed by a further 80-90% increase during the second quarter of 2026.

These rising component costs are then passed on to consumers, with prices for entry-level smartphones becoming unaffordable for many people around the world. This dynamic, GSMA says, threatens to undo the “years of progress made on closing the mobile usage gap”.

“Unless we protect the affordability of entry-level smartphones, billions of people risk being excluded from the next generation of digital services before they have even had the opportunity to experience the internet,” said Badrinath.

This year’s report found that, by the end of 2025, entry-level smartphones cost the poorest 20% of people in low- and middle-income countries up to 44% of their average monthly income and up to 76% in sub-Saharan Africa, with prices expected to continue rising.

GSMA believes the sharp rise in smartphone prices will translate into the “largest annual decline on record” in smartphone shipments globally, with emerging markets the most vulnerable.

Bridging the digital divide

To address the world’s growing digital inequality, the organisation is calling for manufacturers to reduce the price of entry-level smartphones to $30, arguing that this could “make devices affordable for almost 1.6 billion people” while a $20 price point could make them affordable for around 2.2 billion people currently living within mobile broadband coverage.

The telecoms organisation is also calling on chipset and memory manufacturers to “take meaningful steps to increase availability of affordable components for entry-level handsets," arguing that this would help smartphone manufacturers make their entry-level devices more affordable.

GSMA also recommends addressing “other key barriers to digital inclusion" such as “low literacy and digital skills, safety and security concerns, and availability of relevant content and services”.