Deutsche Telekom and Perplexity to create $1000 AI Phone

At the Mobile World Congress (MWC) in Barcelona, Deutsche Telekom (DT) announced a large-scale project that could change the balance of power in the smartphone market. The company presented the concept of an “AI Phone” — an innovative device developed in close collaboration with Perplexity, as well as Picsart and other technology partners.

According to Deutsche Telekom representatives, the device is scheduled for release in the second half of this year, with sales beginning in 2026. A key feature of the smartphone will be its affordability — the price will be less than $1000, allowing it to compete with flagship devices from leading manufacturers. In the initial stage, the product will be exclusively oriented toward the European market, as a company representative told TechCrunch.

“We are becoming an AI company,” said Claudia Nemat, a member of DT’s board of directors overseeing technology and innovation, during a press conference on Monday. She emphasized that although the company is not developing fundamental language models, “we are creating AI agents.”

Special attention in the announcement was given to the role of Perplexity — a Silicon Valley startup whose market valuation has reportedly reached around $9 billion. The company, known for its generative AI search system, views the collaboration with Deutsche Telekom as a strategic step toward creating more “proactive” products.

“Perplexity is transitioning from just an answering engine to an action engine,” noted Perplexity co-founder and CEO Aravind Srinivas, speaking at the event. “It will start doing things for you, not just answering questions. It will be able to book flights for you, make reservations, send emails, messages, make phone calls, and set smart reminders.”

Along with the AI smartphone, Deutsche Telekom announced a new assistant application called “Magenta AI,” which will likely become the central element of the future device’s user interface.

Despite this apparently being the first case of Perplexity collaborating with a telecom operator to develop a smartphone AI interface, the company already has some experience in creating assistants: in January, Perplexity launched an assistant for Android, which could serve as a template for the new “AI Phone.”

This announcement is another step in the long history of relationships between telecommunications companies and technology giants. For many years, telecom operators, both mobile and fixed, have sought ways to compete more effectively with technology companies, and DT’s partnership with Perplexity demonstrates a new strategy in this direction.