Rising Chip Costs Threaten Nigeria's Mobile Access
New data reveals that soaring component prices are making basic smartphones unaffordable for many in emerging markets, deepening the digital divide.
A new report from the Global System for Mobile Communications Association warns that rising costs for smartphone components are threatening digital inclusion in emerging markets. The association states that handset affordability has become the primary barrier to mobile internet adoption in low- and middle-income countries, including Nigeria.
Despite widespread mobile broadband coverage, over 3.4 billion people globally still do not use mobile internet. The GSMA notes that the main issue is not a lack of network access, but rather the inability of consumers to purchase devices capable of connecting to the internet.
Costs Outpace Average Monthly Income
The financial burden of owning a basic smartphone is becoming increasingly heavy for the poorest segments of the population. In low- and middle-income countries, the bottom 20% of earners spend an average of 44% of their monthly income on entry-level devices. In sub-Saharan Africa, this figure rises dramatically to 76%, placing basic digital access beyond the reach of many households.
AI Demand Drives Price Increases
The primary driver of these rising costs is a sharp surge in prices for memory and chipsets. This increase is largely fueled by growing demand from artificial intelligence infrastructure and data centers. Memory prices more than doubled between late 2025 and early 2026, with further increases of 80% to 90% in the subsequent quarter, significantly raising production costs for budget phones.
These production costs are already feeding into retail prices, threatening the viability of the market for smartphones priced below $100. As prices climb, the number of people who can afford to enter the digital economy is shrinking, particularly in regions where consumers depend heavily on low-cost devices.
A Deepening Digital Divide
Vivek Badrinath, the GSMA director-general, emphasized that the benefits of artificial intelligence remain limited for those who cannot afford to get online. He described the growing gap as a divide between those who can participate in the digital economy and those who are excluded. He called for coordinated action from policymakers, operators, and manufacturers to protect the affordability of entry-level smartphones through measures like lower taxation and improved distribution systems, as reported by GN technics/mobile (en-US).
