GenAI is the latest advancement in the smartphone sector, set to change the world as we know it. This groundbreaking technology is poised to become a focal point for innovation, particularly as 5G technology becomes less prominent. GenAI devices are expected to lead the way in redefining the transformative potential of human-machine interaction. But is this truly a revolution or just another instance of marketing hype? Let’s explore the facts behind this emerging trend.
These smartphones are equipped with powerful chipsets that efficiently run large language models (LLMs) like ChatGPT and Google Gemini directly on the device. As these processes shift from the cloud to on-device operations, tasks become faster, more private, and energy-efficient. Real-time language translation, AI-generated content, and hyper-personalized interfaces have now become standard features for premium models.
Hyper-Personalization: GenAI enables smartphones to customize their operation based on user preferences. This includes personalized widgets, predictive scheduling, and intuitive interfaces.
Creative Tools: Users can create 3D models, perform professional video editing, and compose music, all using simple commands.
Advanced Voice AI: With emotion recognition and contextual responses, voice assistants can manage multiple tasks within a single conversation, such as planning vacations or handling finances.
These innovations position GenAI smartphones as more than just communication devices; they are evolving into productivity hubs and creative platforms.
GenAI smartphones have experienced rapid adoption. Projections indicate that these devices will increase from one in five phones sold globally in 2024 to one in three smartphones sold worldwide in 2025. Shipments are expected to exceed 400 million this year, driven by advancements in chip manufacturing and the availability of various lightweight language models.
However, consumer interest appears to be lacking. Both Apple and Samsung offer premium GenAI products—Apple's Intelligence of Apple and Samsung's Galaxy AI—yet it remains uncertain how many consumers will actually choose to purchase them given the potential benefits. The main applications that could stimulate broader market interest are currently missing.
Cost Sensitivity: GenAI-enabled smartphones come with a premium price tag due to their advanced processors and components. The average selling price (ASP) of smartphones is projected to increase by 5% in 2025.
Limited Tangible Benefits: Consumers are looking for practical use cases that significantly enhance their lives. Vague promises of "AI-powered" features do not resonate with users unless there are clear advantages.
Longer Upgrade Cycles: Modern smartphones are already feature-rich and durable, leading users to hesitate when considering upgrades solely for AI capabilities.
GenAI smartphones are being adopted at varying rates across different regions. North America is projected to lead, with nearly 50% of smartphone shipments in 2024 expected to be classified as GenAI smartphones. This percentage is anticipated to rise to 82% by the end of 2028.
Similarly, Western Europe is also embracing GenAI technology, primarily focusing on high-end brands like Apple and Samsung, where ecosystem integration is well established.
In China, the GenAI market is rapidly expanding. Local brands such as Xiaomi, OPPO, vivo, and HONOR are introducing high-end features in sub-premium mobile handsets much faster than their global competitors. This aggressive strategy may put pressure on established brands like Apple.
While GenAI phones offer an exciting opportunity, their success depends on bridging the gap between hype and practicality. OEMs should focus on delivering innovative applications that tackle real-world problems instead of merely making incremental hardware upgrades
Affordable Accessibility: Expanding generative AI (GenAI) capabilities to mid-range devices will democratize access and encourage adoption in emerging markets.
Education and Awareness: Consumers need clear demonstrations of how GenAI can enhance their daily lives, whether through improved productivity or creative empowerment.
Innovative Use Cases: Companies should prioritize developing "killer applications" that make AI indispensable for users.
Looking ahead, the term "agentic artificial intelligence" is expected to gain traction alongside high-end mobile devices as the next big innovation. If implemented correctly, this technology could extend device capabilities beyond current artificial intelligence performance.
GenAI smartphones represent a significant technological advancement in a post-5G world. These devices have the ability to process complex AI models locally, which opens up new possibilities for personalization, creativity, and efficiency. However, widespread adoption may face challenges, such as cost sensitivity and a lack of consumer understanding regarding their benefits.
Whether GenAI smartphones will revolutionize communication or be dismissed as marketing hype depends on how effectively manufacturers address these concerns. If the industry prioritizes accessibility, education, and practical applications, it can unlock the true potential of this technology, transforming these devices from mere tools into essential companions in today's world.