As anticipated, this year’s MWC in Barcelona has witnessed a significant announcement from a carrier regarding a collaborative effort with a major AI company to develop a smartphone. T-Mobile, a mobile telco owned by Deutsche Telekom, has unveiled plans to create an “AI Phone”, a low-cost handset designed in conjunction with Perplexity, Black Forest Labs, Picsart, and other partners. Additionally, the company will introduce a new AI assistant app called “Magenta AI.” The device is scheduled to be unveiled in the second half of this year and will be available for purchase in 2026 at a price point below $1,000.

“We are transforming into an AI company,” stated Claudia Nemat, a DT board member overseeing tech and innovation, during a press conference on Monday. However, she clarified that the company is not focusing on building foundational large language models, instead, it is developing AI agents.

Perplexity is playing a crucial role in the development of the phone, signaling the startup’s efforts to create more “proactive” products. Currently, Perplexity is best known for its generative AI search engine.

“Perplexity is evolving from being just an answer machine to an action machine,” said Aravind Srinivas, the startup’s CEO, during the event. “It will start performing tasks on your behalf, such as booking flights, making reservations, sending emails, and setting smart reminders, rather than just providing answers to your questions.”

Nemat did not elaborate on the device’s specifications, such as who is manufacturing it or the operating system it will run on. However, she mentioned that the phone will be priced significantly lower than $1,000, which is the typical price range for high-end devices like the iPhone.

The phone will have AI integrated into its core, with the experience built by Perplexity, allowing users to “experience the full Monty.” The AI will be present on the lock screen, providing a seamless user experience.

Other services on the phone will include Google Cloud AI, ElevenLabs, and Picsart, according to the company.

Magenta AI, the app-based version of T-Mobile’s AI assistant, will be available for installation on Android and iOS devices, but only for T-Mobile’s 300 million customers, as stated by Nemat.

This announcement is the latest development in the long-standing narrative of telecom companies seeking to compete with technology giants. For years, carriers have attempted to find ways to rival companies like Apple and Google, which have dominated the market with their operating systems and phones, effectively cutting telecoms out of the equation when it comes to generating revenue from apps and customer relationships.

Deutsche Telekom has been involved in a prolonged legal dispute with Meta in Germany over the prices Meta pays to carry traffic over DT’s network in the country.

By embracing the current trend of AI, this phone represents DT’s latest attempt to gain a stronger foothold in the market.

However, it’s worth noting that moving quickly is not a characteristic of this effort. Perplexity and Deutsche Telekom have been collaborating since April 2024, and DT first discussed the AI Phone concept at last year’s Mobile World Congress event.

For Perplexity, the company faces competition from well-capitalized companies like OpenAI and Anthropic, as well as big tech companies like Google, which has integrated its Gemini AI into its basic search experience. In this context, Perplexity appears to be focusing on the next phase of AI development, where AI tools improve user experience.

“These are the kinds of tasks that you would previously have to perform manually, learning how to use different apps,” Srinivas explained. “All these tasks will become easier, allowing you to focus on problem-solving… This is the next phase where AI will transition from being reactive to proactive, always listening and ready to assist you.”

It remains to be seen whether T-Mobile or Perplexity will be able to successfully penetrate the highly competitive smartphone market, which has seen even large companies like LG exit the scene. Nevertheless, this development highlights the strong pull of AI and the desire of both legacy companies and cutting-edge startups to capitalize on its potential.