Chinese manufacturer Luxshare has been named as the exclusive system co-design and manufacturing partner for the device.

The project marks a significant step in OpenAI’s push into consumer hardware. Unlike conventional smartphones augmented with AI features, the device is said to be designed from the ground up around AI agents, positioning the agent itself as the primary interface, rather than traditional apps.

Kuo is projecting mass production to begin in 2028, with specifications and the supplier list expected to be finalised by late 2026 or early 2027.

If the device reaches commercial scale, the analyst estimates annual shipments could reach between 300 and 400 million units, a volume that would surpass Apple’s iPhone output and put OpenAI in direct competition with the two companies that currently control around 40% of the global smartphone market.

The rationale for a dedicated handset, according to Kuo, is one of control. “Only by fully controlling both the operating system and hardware can OpenAI deliver a comprehensive AI agent service,” he said. “The smartphone is the only device that captures the user’s full real-time state, which is the most important input for real-time AI agent inference.”

The news sent Qualcomm’s stock up as much as 13% in premarket trading on April 27. None of the three companies, Qualcomm, OpenAI, or MediaTek, have confirmed the partnership publicly.

The project runs parallel to OpenAI’s separate hardware venture with Jony Ive’s design firm io, which the company acquired for $6.5 billion. Sam Altman has previously indicated that device would differ fundamentally from a smartphone.

It is worth noting this remains an analyst report rather than a formal announcement, and OpenAI has yet to ship any consumer hardware product.

RELATED STORIES

Qualcomm unveils AI200 and AI250, its latest AI solution for data centres

OpenAI predicts major AI breakthroughs by 2028, despite ‘serious weaknesses’