Why AI means your iPhone tariff is going to rise
Your monthly cellular service charge is likely to rise as an indirect cost of AI deployment, Nokia and Ericsson warn.
A Light Reading report explains their concern. They believe 5G rollout is likely to be impacted by the climbing cost of networking equipment as vendors manage huge component price increases.
Network effects
That’s going to lead to delays in 5G deployment as carriers struggle to actually get the kit they need, but may also cause further cost inflation as the increased costs of ecosystem investment are passed along to customers.
These same carriers are struggling to fulfil demand as component shortages impact smartphone makers. The thing is, memory chips are also used in networking equipment, which means the cost of routers and everything else carriers use to provide network services is also set to rise, including costs of ASICs used for baseband gear. AI’s relentless demand for memory and processors is becoming a massive problem.
“AI is driving up the demand for semiconductors in general,” Per Narvinger, the head of Ericsson’s mobile networks business group told Light Reading. “Many of the AI workloads are competing for the same wafers that we are also interested in.”
AI squeezes everything
This is a problem for everyone in the industry, as Ericsson finds its margins deeply squeezed in consequence, which is why carriers will eventually pay more for their networking kit. And why you and every iPhone owner will also find the monthly charges increase.
It’s not just about networking kit, computers, or even smartphones the ongoing consequence of AI deployment and the economic suicide of the war against Iran are impacting all kinds of electronics prices, including networking kit.
Nokia and Ericsson have both cut thousands of jobs to maintain profitability as a result of the need to shore their business up in the current environment.
But the undeserved hurt may turn out to be the consumers who never asked for it, people who while bearing the brunt of AI-driven redundancies may also soon see the cost of their mobile service tariffs increase dramatically, along with everything else. What a time to be alive.
Photo by Nick Fewings on Unsplash
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