Mobile phone makers ride the wave of artificial intelligence

Mobile industry embraces artificial intelligence hoping this wave of innovation will encourage consumers to upgrade their devices. The generative version emerges as an opportunity to boost sales in the sector. suffered from sluggish demand, and in 2023 it experienced its worst year in a decade in terms of units sold. After several years without major technological leaps beyond the foldable format, which remains a niche product due to its status as a premium device, manufacturers are confident that generative artificial intelligence can help them seduce consumers again.

The recent launch of the Samsung Galaxy S24 family confirms that artificial intelligence will be the great mantra of this year in the mobile industry. Many manufacturers will follow in the footsteps Samsung: They will stop emphasizing hardware specifications and focus their marketing messages on the artificial intelligence capabilities of mobile phones. “We expect to see high levels of enthusiasm and excitement,” Counterpoint analyst Tarun Pathak confirmed in a briefing.

Manufacturers promise to offer more and more features. artificial intelligence on mobile phonel. The idea is that consumers can run some of these experiences locally, even offline, although others will require a connection to cloud services.

Achievements in processors mobile devices optimized to perform artificial intelligence tasks in their neural processors, as well as the development smaller natural language models They allow this scenario so that AI applications can be run on the mobile phone itself. This way you can get faster responses and improve security and privacy by storing data on your mobile phone.

Cristiano AmonCEO of processor manufacturer Qualcomm, pointed out other benefits in a recent interview with the Financial Times. On the one hand, it is more accessible because it uses the computing power of the device rather than the cloud. What’s more, this artificial intelligence “can be more accurate because it has real-world context about what you’re doing, where you are, etc.”

Because?

The first generation of mobile phones with generative artificial intelligence will focus on areas such as: Simultaneous translation of text and voice calls in real time.transcription and summary of entries and annotations, intelligent writing assistance, new ways to search for information or generative photo editing.

The question is whether these new mobile features such as Galaxy S24 or Pixel 8 They are attractive enough for users to decide to change their mobile phone. Amon believes this scenario “has the potential to create mobile phone update cycleThis could accelerate the current rate of terminal replacement, he said, meaning there is “great potential for growth.”

Samsung, which wants to be at the forefront of this technology solution, is convinced that this commitment to generative artificial intelligence will be a lever to intensify sales. “I think your commitment to AI will help you achieve your goal of driving users update your old models a new family or last year’s that will also get some of these features,” he says. Carolina Milanesi, Creative Strategies Analyst. This expert believes that the adoption of artificial intelligence in the mobile industry is necessary to ensure that mobile phones “remain relevant” in a scenario in which personal computers will also be enriched with artificial intelligence capabilities.

Chance

In this sense, Canalys analysts believe that the integration of generative artificial intelligence is a “strategic imperative for manufacturers” at a time when the industry is “searching for new growth opportunities.”

Paolo Pescatore, an analyst at PP Foresight, notes in an informative note that manufacturers still face a problem “convince consumers” to buy new mobile phones in unfavorable economic conditions. Aside from artificial intelligence, hardware improvements in Samsung’s latest lineup are “incremental” in nature, which could be a drag for many users, he said.

According to IDC, global smartphone sales fell 3.2% last year to a total of 1.17 billion units, the lowest volume in a decade, due to a weak macroeconomic environment and excess inventory inherited from the digital boom in pandemic time. “There is no doubt that the industry could use new technologies such as generative artificial intelligence to revitalize the market,” says Brian Ma.

However, he clarifies that “compressing” AI models to run them locally, as well as discovering new uses for the technology, “is an ongoing process, so any recovery is likely to be gradual.” IDC expects the global mobile market to grow 3.8% year-on-year this year, “driven by modest improvements in macroeconomic conditions and demand,” it said.

According to consulting company Counterpoint, this year approximately 100 million mobile phones with generative artificial intelligencethis figure will reach 522 million units in 2027.

At the first stage they will high-end devices, so they will represent a small percentage of the global mobile market. Generative AI mobile phones will account for 5% of the global market this year, according to Canalys, which is lowering its 2024 sales forecast to about 60 million units.

The turning point may come in a couple of years when we see a wide range of prices for this type of device. According to Canalys, mobile phones with generative artificial intelligence will account for 45% of sales in 2027.

Brian Ma is optimistic. “We have already seen vendors such as Samsung demonstrating AI capabilities in areas such as language translation, meeting summary and image search, among many others. But the most interesting thing is that in the coming years developers will find even more attractive use cases“He predicts.

Samsung moves the token

The truth is that Samsung has quickly moved forward to lead this wave in the Android ecosystem and keep pace with Apple, which in 2023 seized the throne of the largest mobile device manufacturer in terms of units sold after twelve years of leadership. Apple also wants to introduce generative artificial intelligence into its mobile phonesThe Financial Times reports this.

Counterpoint predicts that Samsung will take almost half of the mobile market using generative artificial intelligence in the next two years before Chinese manufacturers who will also board this train. “For most consumers, this is still a new concept, but I think the new features make Samsung the best product in the Android ecosystem thanks to closer collaboration with Google, both in services and applications, like in artificial intelligence,” explains Milanesi .

In his opinion, for those users who “heavily depend on Google services, the Samsung Galaxy S24 family could become more attractive thanks to artificial intelligence.”

For his part, Pescatore notes that Samsung must focus its efforts on retaining its loyal premium base, and believes that the new artificial intelligence features are in that direction. “This could be the start of a new era for mobile phones. This represents a decisive sales supercycle for Samsung and the rest of the manufacturers,” he defends.