AI boom threatens smartphone affordability
Memory prices surge as AI infrastructure expands, putting pressure on entry-level smartphones, says the GSM Association.
The global rise of artificial intelligence (AI) is putting strain on the affordability of budget smartphones, threatening to deepen the digital divide in low- and middle-income countries, according to a report from the GSM Association (GSMA). The report warns that increasing demand for memory and chipsets in AI infrastructure and data centers is driving up component costs, leading to higher smartphone prices.
Despite living within mobile broadband coverage, over 3.4 billion people remain unconnected to mobile internet due to affordability and other barriers. The report highlights handset affordability as the primary obstacle to mobile internet adoption, with an entry-level internet-enabled handset costing 44% of an individual's average monthly income for the poorest 20% in low- and middle-income countries, rising to 76% in Sub-Saharan Africa.
Vivek Badrinath, GSMA's director-general, emphasizes that affordability could determine who participates in the emerging AI economy, warning that the greatest risk is not just an AI divide between countries, but between people who can afford digital services and those who cannot. To prevent this outcome, the GSMA calls for coordinated action from policymakers, mobile operators, device manufacturers, and component suppliers to protect the affordability of entry-level smartphones and prevent billions of people from being excluded from the next generation of digital services.
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