The AI boom is making smartphones less affordable for Africans

In Lagos’ Computer Village, the most important conversation about artificial intelligence is not about ChatGPT, Claude, Meta AI, Grok or Gemini. It is about memory.

In 2025, the Global System for Mobile Communications Association (GSMA) announced a strategic partnership with six leading African operators to push a $40 4G smartphone across Nigeria, Rwanda, DRC, Ethiopia, Tanzania and Uganda. It was supposed to be the gateway device for closing the continent’s digital divide.

The State of Mobile Internet Connectivity 2026, released this month by the GSMA, contains a one-line obituary for that promise:

“With a single entry-level memory chip now costing more than that alone, progress on making devices more affordable is at significant risk.”

The report’s new Spotlight – “The memory price crisis threatening handset affordability” – is the most important thing in this year’s edition. The AI boom that will help a farmer in Kaduna check crop prices is making the chip inside the phone he needs unaffordable.

Nigeria: 86% aware, 51% own

The report tracks a user journey in six stages: mobile ownership, mobile internet awareness, internet-enabled phone ownership, mobile internet adoption, daily use, and diverse daily use. Users drop off at each stage, and women and rural populations are more likely to drop off than men and urban dwellers.

Read also: In Nigeria’s always-on economy, the smartphone is both the job and the disruption

Across most countries surveyed, the most significant drop-off occurs between awareness (stage 2) and internet-enabled phone ownership (stage 3), particularly among rural respondents and women.

In Nigeria, for example, 86% of rural respondents are aware of mobile internet, yet only 51% own an internet-enabled phone – a drop-off of 35% compared to 18% among urban respondents. A similar pattern is observed for women relative to men.

Of that 86%, only 33% use it — 24% daily, and 13% use it for three or more things a day. The collapse happens at the point of purchase.

“Once people own an internet-enabled phone, most use mobile internet. This is also the case for those living in rural areas and women. Focusing on efforts to increase internet-enabled phone ownership, especially among rural populations and women who are already aware of mobile internet, is therefore likely to be the most effective way to significantly reduce the rural-urban and gender gaps.”

Nigeria does not have an awareness problem. It has a device-ownership problem, which is now an AI-driven memory-pricing problem.

Sub-Saharan Africa: the worst affordability maths in the world

Sub-Saharan Africa (SSA) remains the region with the lowest percentage of the population using mobile internet, at only 25%. It has both the largest usage gap (people who have a signal but no phone or reason to use it) and the largest coverage gap, at 66% and 9%, respectively.

Among adults, the figure rises to 42%, yet more than half remain offline. Half of the region’s mobile internet subscribers still access the internet on 3G smartphones or feature phones, compared with 13% globally.

SSA accounted for more than half of global 4G coverage gains in 2025, with 81% of the region’s population now living within 4G coverage.

Eight countries still have a coverage gap of 15% or more, and seven of those are least developed countries, but the masts are no longer the binding constraint. The price is.

Across Low- and Middle-Income Countries (LMICs), an entry-level internet-enabled phone cost 44% of average monthly income for the poorest 20% by the end of 2025. In Sub-Saharan Africa, it is 76%.

The GSMA’s affordability threshold is 15-20% of monthly income. Only 52% of LMICs had a device available for less than 15% of income; only 64% had one for less than 20%.

A GSMA model for the impact of cheaper devices showed that a $30 device could, in theory, make phones affordable to just under 1.6 billion people and a $20 device to an additional 2.2 billion. Still, 850 million people would still be priced out.

Read also: The smartphone market stopped chasing growth in 2025. Now it’s chasing intelligence in 2026

“In Sub-Saharan Africa, handsets do not become more affordable to a significant proportion of people until the device price is reduced to $20, which would make devices affordable to an additional 18% of the population – 230 million people – rising to 46% – 580 million people – at $10,” the report said. “Even at $10, the remaining 20% of the population living within mobile broadband coverage but not using it – 240 million – would still find a device unaffordable.“

Data costs compound the cost of owning a phone. In Sub-Saharan Africa, 20 GB of data costs 14% of average monthly income, five times the median across LMICs, and 44% of monthly income for the poorest 20%.

Why the phone got more expensive

Memory is essential in smartphones in two forms. Dynamic Random-Access Memory (DRAM) is short-term storage that holds active apps and enables multitasking; older DRAM is Low-Power Double Data Rate 4 (LPDDR4) – designed for battery-powered devices (phones, tablets) rather than desktop computers, while the newest and most in demand by both smartphones and data centres is Low-Power Double Data Rate 5, Extended (LPDDR5x) – a low-power memory standard built for battery-powered devices, but two generations newer and faster.

NAND – the phone’s permanent storage or long-term storage for photos and apps, either Universal Flash Storage (UFS 4.0) – current mainstream standard, used across most phones including entry-level ones or, for flagships and AI-driven applications, UFS 4.1 – a refinement of 4.0 with faster read/write speeds and better power efficiency, aimed at flagship phones and AI-driven features that need to move large amounts of data quickly.

“Prices are increasing rapidly as demand grows for high-performance memory to power AI operations and data centres, including DDR5 memory used in flagship smartphones. At the same time, manufacturing is shifting away from older memory platforms such as DDR4, which is still used in entry-level handsets.”

Memory prices more than doubled between Q3 2025 and Q1 2026, then jumped a further 80–90% in Q2 2026 alone. The memory share of a smartphone’s bill of materials (BoM) has more than doubled since Q1 2025. In a mid-range phone ($400–600 wholesale), memory is now almost 30% of the total BoM. In a low-end phone (under $200 wholesale), where margins are thinnest, it is almost half.

This is already showing up at retail. The entry-level Xiaomi Redmi A7, released in April 2026 at around $110, is 40% more expensive than the Redmi A5 was a year earlier, despite almost identical hardware. In India, the Realme C71 launched in June 2025 at INR7,699 ($80) has since risen almost 70% to INR12,999 ($135).

The shipment forecast is where it becomes an African story. Global smartphone shipments are expected to record the largest single annual drop in history in 2026, down 14% year-on-year, or 174 million fewer handsets.

Most of that decline sits in the sub-$100 segment, expected to fall 36% – around 90 million fewer phones. SSA alone is expected to see 16 million fewer smartphones shipped in 2026, down more than a quarter from 2025.

“This represents a considerable threat to the growth of smartphone adoption in emerging regions, slowing digital expansion and ecosystem development.”

There is a lag, and consumers have not felt the full increase yet, because stock bought at older prices is still being sold.

Beyond the 4.8 billion people using mobile internet on their own device, a further 650 million, 8% of the global population, use mobile internet exclusively through borrowed or shared devices.

In Nigeria, it shows up as family phones, market stall phones and children on their parents’ devices. Just over half of children aged 5-17 now use mobile internet, on their own or a shared device.

Approximately 10 million children became new mobile internet users globally in 2025, with 2/3 of that growth concentrated in SSA.

Connected, but scared and shallow

An average of 83% of mobile internet users across the countries surveyed report daily use, but many engage in only one or two activities. Communications, social media and entertainment dominate, and awareness of those is near-universal.

Awareness declines for everything else. Income generation, ordering goods and services, online banking, and health and government services are among the least known and least used.

Nigeria sits at a different point on that curve. For existing Nigerian users, affordability is still the top barrier, with safety and security second, and connectivity experience and literacy also ranking.

For Nigerians who are aware of mobile internet but not using it, the barriers are affordability, literacy and digital skills, and safety and security. Regionally, affordability, particularly of handsets, is reported more frequently in Sub-Saharan Africa than in any other region.

Read also: What Nigerians are buying as smartphone prices rise in Africa

What needs to happen

The report’s call to action is not “build more 4G” but something entirely different.

“With handsets becoming increasingly unaffordable (driven by the memory crisis), it will be important to prioritise actions to mitigate this impact. Examples include tax reforms, such as removing taxes or duties on entry-level devices, improving access to device financing, improving willingness to pay and addressing other costs beyond device ownership.”

Alongside that, the GSMA calls for digital skills initiatives focused on the life needs of users and on trust.

“Appropriate mechanisms and frameworks that recognise and address these online risks should be established to help build consumer trust. Stakeholders should provide users, including women, with the tools to increase their knowledge and skills to mitigate online risks.”