GSMA warns rising smartphone costs could widen global AI divide

Details: Manny Pham; Category: Consumer Ecosystems; 15 September 2026; 430 views

The GSMA has warned that rising smartphone component costs could widen the digital divide as 3.1 billion people remain offline despite living within mobile broadband coverage.

The warning comes in the GSMA's State of Mobile Internet Connectivity (SOMIC) Report 2026, which found that 4.8 billion people now use mobile internet on their own device. However, growth is slowing, with around 160 million people coming online in 2025 compared with 190 million in 2024.

The majority of those still offline are covered by mobile broadband networks but do not use mobile internet. The GSMA identifies handset affordability as the biggest barrier to adoption across surveyed low- and middle-income countries, followed by a lack of digital skills.

At the end of 2025, an entry-level internet-enabled handset cost the poorest 20% of people in LMICs an average equivalent to 44% of monthly income. The figure rose to 76% in Sub-Saharan Africa.

The affordability problem is being compounded by soaring memory and chipset costs, which the GSMA says are being driven in part by demand from AI infrastructure and data centres. Memory prices more than doubled between Q3 2025 and Q1 2026, before rising by a further 80-90% in Q2, according to GSMA analysis and Counterpoint Research data.

The impact is already being felt in the smartphone market, with entry-level handset prices rising and the sub-$100 segment facing a sharp decline. The GSMA expects emerging markets to be among those hardest hit.

Until recently, the GSMA estimated that reducing entry-level smartphone prices to $30 could make devices affordable for almost 1.6 billion additional people living within mobile broadband coverage. A $20 price point could extend affordability to around 2.2 billion people. The GSMA now warns that rising component costs are making those targets increasingly difficult to achieve.

The affordability issue has implications beyond basic internet access. As AI-powered services become more widely deployed in areas such as healthcare, education, financial services and government, people without affordable smartphones risk being excluded from the next generation of digital services.

GSMA Director General Vivek Badrinath said the industry needed coordinated action from governments, operators, device manufacturers and component suppliers to prevent smartphone prices from undermining digital inclusion.

The GSMA is calling on memory and chipset manufacturers to increase the availability of affordable components for entry-level devices, while urging policymakers and financial institutions to consider measures including taxation changes and support for device reuse.

The economic stakes are significant. Previous GSMA analysis estimated that closing the mobile usage gap could generate $3.5 trillion in additional GDP between 2023 and 2030, with more than 90% of the benefits flowing to low- and middle-income countries.

The report also identifies literacy, digital skills, online safety and the availability of relevant content and services as barriers to adoption. The GSMA said addressing these alongside handset affordability will be necessary if the expansion of AI and digital services is to benefit populations that remain largely offline.