Now and next for AI-capable smartphones report 2024

Why read this complimentary report about AI smartphones from Canalys?

The "Now and Next for AI-Capable Smartphones" report by Canalys offers an invaluable resource for understanding the transformative impact of artificial intelligence on smartphones.

The report provides a detailed analysis of how AI is being integrated into smartphones, revolutionizing their capabilities and functionalities. Understanding this integration is essential for industry players to anticipate market trends, align their strategies, and stay competitive. The report delves into the hardware and software advancements that define AI-capable smartphones, offering a clear picture of the current and future landscape.

Canalys projects that by 2025, 58% of new smartphones will be generative AI-capable. This surge reflects advancements in chipset technologies and growing consumer demand for AI capabilities. The report suggests that vendors can leverage unique AI features to enhance user experiences and gain market share. It highlights early AI features like multimodal capabilities and personalized experiences, and their impact on entertainment, communication, and productivity. For investors and business leaders, these insights are crucial for making informed decisions and identifying growth opportunities.

The report provides insights into how major players like Apple, Google, HONOR, Huawei, MediaTek, OPPO, Samsung, Qualcomm, and vivo are shaping the AI smartphone market. These companies lead in integrating AI into devices, setting competitive standards, and driving innovation. Understanding their strategies offers valuable knowledge on best practices, emerging trends, and industry challenges.

While the proliferation of AI-capable smartphones presents substantial opportunities, it also brings challenges such as the need for robust privacy protections, developing a sustainable ecosystem for third-party AI applications, and educating consumers about the benefits and limitations of on-device AI functionalities. The report addresses these challenges, providing actionable insights on how to navigate them effectively. This is particularly important for OEMs and developers who must balance innovation with ethical considerations and consumer trust. For original equipment manufacturers (OEMs), the report provides strategic recommendations on how to invest in and monetize AI features, develop new revenue models, and enhance user loyalty. It outlines potential business models such as AI-as-a-feature, AI-as-a-service, and AI-as-a-interface, offering a roadmap for leveraging AI to create competitive advantages. These recommendations are essential for OEMs to stay ahead in a highly competitive market.

Understanding consumer interest and adoption trends is key to developing successful AI-capable smartphones. The report includes insights from the Canalys Consumer AI Inclination Index, which measures consumer interest and attitudes towards AI capabilities on smartphones. By analyzing these trends, vendors can tailor marketing strategies and product development efforts to better meet consumer expectations and drive adoption.

Finally, the report offers a forward-looking perspective on the future of AI-capable smartphones, projecting market share growth and technological advancements through 2028. It addresses the long-term implications of AI integration, providing a strategic vision for industry players to navigate the evolving landscape of mobile technology.

The "Now and Next for AI-Capable Smartphones" report is an essential resource for anyone involved in the smartphone industry. It provides comprehensive analysis, market projections, strategic insights, and actionable recommendations that are crucial for staying competitive and driving innovation in the era of AI-capable smartphones.

Companies appearing in this report: Alibaba, Apple, Baichuan, Baidu, Google, HONOR, Huawei, IBM, MediaTek, OPPO, OpenAI, Qualcomm, Samsung, vivo, Xiaomi

Key findings

Major manufacturers such as Samsung and Apple are driving the integration of AI capabilities, setting competitive standards in the market. Canalys predicts that 16% of new smartphones will be generative AI-capable by the end of 2024, driven by advancements in chipset technologies and increasing consumer demand.

• Defined by Canalys as devices with dedicated AI hardware (eg, ASICs) capable of efficiently executing large generative AI models on-device.
• The Canalys Consumer AI Inclination Index shows varying regional interest in AI capabilities, highlighting the importance of localized marketing strategies.
• AI-capable smartphone market share is projected to reach 54% by 2028, driven by improvements in generative AI models and hardware advancements.
• Challenges include ensuring robust privacy protections, developing a sustainable ecosystem for third-party AI applications, and educating consumers about on-device AI functionalities.