AI-driven smartphone price hikes deepen digital access gaps for low-income populations

Global entry-level smartphone costs surged as AI demand reshapes supply chains, pushing the poorest to spend 76% of monthly income on basic devices.

Global smartphone prices rose 15% for existing models in 2026, with new models increasing 25% year over year. Chinese manufacturers like Xiaomi, Oppo, and Vivo reduced sub-$150 shipments this year—Xiaomi raised its Redmi 15C price by 36% in India (from $140 to $190), while Oppo’s sub-$100 shipments dropped 96% in Southeast Asia. Sub-$100 global shipments fell 60% in Q2 2026, and sub-Saharan African consumers now spend 76% of their monthly income on entry-level phones. This shift follows memory chip suppliers (Samsung, SK Hynix, Micron) controlling 90% of the market and redirecting supply to AI data centers after late-2025 pivots. For the poorest 20% globally, entry phones cost 44% of their monthly income—a burden that intensifies digital exclusion as AI-driven demand outpaces affordability.

The friction stems from AI infrastructure investment: U.S. hyperscalers projected $1.3 trillion in 2027 capital spending, diverting memory chips from low-cost devices. This creates a direct trade-off between AI advancement and basic digital access. As entry-level phones become scarce, the poorest populations face higher costs for essential connectivity—undermining knowledge and community access without new subsidies or supply chain adjustments.

What to watch: Memory chip allocation shifts could reverse this trend if AI data center demand slows. But with GSMA projecting 800 million new mobile users by 2030, rising costs may deepen inequality unless interventions target the 44% income strain for the global poor. The source notes these trends reflect data as of October 2026 and shipment metrics—full context remains with the original reporting.

Source: Rest of World