The global artificial intelligence (AI) boom is putting pressure on the affordability of entry-level smartphones, threatening to widen the mobile internet usage gap in low- and middle-income countries.
The GSM Association’s (GSMA’s) latest State of Mobile Internet Connectivity 2026reportwarns that rising demand for memory and chipsets used in AI infrastructure and data centres is driving up component costs and, in turn, smartphone prices.
With 3.4 billion people still not using mobile internet despite living within mobile broadband coverage, the report notes rising smartphone component costs could deepen the global AI divide,
More than 90% of the people who do not use mobile internet already live within mobile broadband coverage, highlighting affordability and other adoption barriers rather than network availability alone.
The report identifies handset affordability as the biggest barrier to mobile internet 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 low- and middle-income countries the equivalent of 44% of their average monthly income.
In Sub-Saharan Africa, this figure rose to 76%, the report points out.
Vivek Badrinath, director-general of the GSMA, says the consequences extend beyond access to smartphones, as affordability could determine who is able to participate in the emerging AI economy.
"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.
“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. The current memory price increases make this a clear and present danger.”
According to the GSMA, preventing that outcome requires coordinated action from policymakers, mobile operators, device manufacturers and component suppliers alike.
“We call upon all parties to mobilise all possible tools, both on the production side and on the distribution and taxation areas, and to take measures to ease reuse of devices," it states.
The affordability challenge is being compounded by rising memory costs.
According to the GSMA and data from Counterpoint Research, memory prices more than doubled between the third quarter of 2025 and the first quarter of 2026, before increasing by a further 80% to 90% in the second quarter.
The GSMA adds: “The increases are already feeding into entry-level smartphone prices, with global smartphone shipments forecast to experience their largest annual decline on record, driven primarily by the collapse of the sub-$100 handset segment. Emerging markets are expected to be among those hardest hit.”
Africa faces higher barrier
The smartphone affordability problem is particularly pronounced in Sub-Saharan Africa, according to the report.
“By the end of 2025, an entry-level internet-enabled handset cost the poorest 20% of people in LMICs the equivalent of 44% of their average monthly income, rising to 76% in Sub-Saharan Africa.”
The figures underline the importance of handset prices in determining whether consumers can move from being covered by mobile networks, to actually using mobile internet.
The GSMA says that, until a year ago, reducing the price of entry-level smartphones to $30 could have made devices affordable for almost 1.6 billion people. A $20 price point could have made them affordable for around 2.2 billion people living within mobile broadband coverage.
However, the report notes rising memory costs mean those price points are now increasingly out of reach.
The GSMA's Handset Affordability Coalition is among initiatives seeking to address the affordability challenge, but the report argues that broader action across the mobile ecosystem is required.
“The implications extend beyond individual consumers' ability to access online services. GSMA analysis estimates that closing the mobile usage gap could generate $3.5 trillion in additional GDP between 2023 and 2030, with more than 90% of those benefits flowing to low- and middle-income countries.”
Improving handset affordability must be accompanied by efforts to address other barriers to mobile internet adoption, including low literacy, digital skills, safety and security concerns, and the availability of relevant content and services, notes the GSMA.
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