It was inevitable that this year at MWC in Barcelona, at least one carrier would announce a major effort at building a smartphone with a top AI company. And here it is: T-Mobile, the mobile telco owned by Deutsche Telekom (DT), said that it is building an “AI Phone,” a low-cost handset created in close collaboration with Perplexity, along with Picsart and others, plus a new AI assistant app it’s calling “Magenta AI.”
T-Mobile said it will unveil the device in the second half of this year, and it will start selling it in 2026 for a price tag of less than $1,000.
“We are becoming an AI company,” Claudia Nemat, a DT board member who oversees tech and innovation at the telecom, said during a press conference Monday. It’s not building foundational large language models, she was quick to add, “but we do the AI agents.”
Notably, Perplexity is playing a key role in the development of the phone — a signal of how the startup, best known today for its generative AI search engine, is taking steps to create more “proactive” products.
“Perplexity is transitioning from just being an answer machine to an action machine,” Aravind Srinivas, Perplexity’s co-founder and CEO, said on stage at the event. “It is going to start doing things for you, not just answering questions. It’s going to be able to book flights for you, book reservations for you, send emails for you, send messages, place phone calls for you, and all those sort of things, like set smart reminders.”
Nemat did not get into many details of the hardware, like device specifications, nor did she give information on who is building it and what operating system it will run on (from the concept renderings, it looks like a flavor of Android). But she did note that the phone will have AI baked in, with the experience built by Perplexity “so that you can experience the full Monty,” she added: “AI on your lock screen.”
Other services on the phone will include AI from Google Cloud, ElevenLabs, and Picsart, T-Mobile said.
Magenta AI, which will be an app-based version of T-Mobile’s AI assistant, will be available for those who want to install it on their own Android or iOS devices — as long as you are already one of T-Mobile’s 300 million customers, Nemat said.
The news is the latest development in a familiar story from the world of telecoms. For years, carriers — both mobile and fixed — have pined for ways to compete better with technology companies. Specifically, they have focused on the likes of Apple and Google, which have been operating systems and phones that largely cut telecoms companies out of the equation when it comes to making money around apps, and “owning” that customer relationship.
(And their ire is not only trained on those two. Deutsche Telekom has been in a long-running legal dispute with Meta in Germany over the prices that Meta pays to carry traffic over DT’s network in the country.)
Leaning into the current vogue for all things AI — which is a pervasive theme at MWC this year — this phone is DT’s latest attempt to gain some stronger footing of its own.
But moving fast is not really in the playbook here. Perplexity and Deutsche Telekom have been working together since inking a partnership in April 2024. And DT first talked about this AI Phone a full year ago, at last year’s Mobile World Congress event.
For Perplexity, the company has not just to compete with the likes of the very well-capitalised OpenAI and Anthropic when it comes to building new AI tools for consumers; but also big tech companies like Google, which has baked in its Gemini AI into its basic search experience. So here, it seems that Perplexity is leaning into the next phase of how AI can improve user experience.
“These are the kinds of things that earlier you would have to do in your own way, learning how to use these different apps,” Srinivas said. “All these things are going to start becoming easier so that you can focus your time and energy on problem solving…. This is really the next phase where AI are going to transition from being just reactive and having you input prompts into something that’s just natively there on your phone, always listening to you and being able to be proactively assist you.”
It remains to be seen whether T-Mobile or Perplexity will be able to crack the notoriously tricky smartphone market, which is dominated by a small number of companies and has over the years even seen leviathans like LG cash in their chips and back away. It nevertheless points to just how magnetic the AI pull is right now, and how even the most legacy companies see it as a possible panacea. And how even the most cutting-edge startups are looking for safe moats amid fierce competition in their market.
