Joy Agwunobi
The global smartphone industry is gearing up for a huge transformation as artificial intelligence (AI) becomes a core feature in mobile devices.
According to a recent report by Counterpoint Research, nearly 90 per cent of smartphones priced above $250 are expected to incorporate generative AI (GenAI) capabilities by 2028, marking a shift in consumer expectations and device functionality.
In 2024, the introduction of GenAI in smartphones was largely limited to premium models, spearheaded by tech giants like Samsung and Apple. Samsung’s Galaxy S24 series, for instance, emerged as the first AI-centric smartphone lineup, offering advanced features that resonated strongly with consumers in markets like Western Europe and the United States. These innovations contributed to Samsung’s position as the global market leader in smartphone shipments for the year.
The report highlights the growing role of GenAI in enhancing smartphone functionality, from personalised user experiences to more efficient device operations. Analysts predict that as AI technology becomes more affordable and scalable, its integration will extend beyond flagship models, finding its way into mid-range devices.
The trend toward premiumisation in the smartphone market is accelerating this shift. The report noted that Ultra-premium smartphones, priced above $1,000, experienced the fastest growth in 2024, driven by robust consumer demand and favourable financing options. Developed markets benefited from carrier subsidies, while emerging markets saw increased access to low-cost financing, making high-end devices more accessible to a broader audience.
Counterpoint Research attributes this growth to a combination of economic recovery and consumers’ willingness to invest in feature-rich devices that offer long-term value. “Smartphones remain central to everyday life, and as GenAI matures, it will redefine how users interact with their devices,” the report noted.
Despite its promise, the rollout of GenAI in smartphones faces challenges. Initial adoption has been constrained by the high costs associated with integrating AI processors and software into devices. However, as competition intensifies and technology advances, prices are expected to normalise, making way for broader adoption.
The integration of GenAI into smartphones signals a new chapter for the industry, with implications for manufacturers, app developers, and consumers alike. As AI technology evolves, its impact will likely extend beyond entertainment and productivity, playing a vital role in addressing global challenges such as health, education, and sustainability.
By 2028, the convergence of AI and mobile technology is expected to redefine the competitive landscape, fostering innovation and setting new benchmarks for what smartphones can achieve. For consumers, the next generation of AI-powered devices promises a future where smartphones are not just tools but intelligent companions designed to enhance every aspect of daily life.
The shift toward GenAI functionality is expected to revolutionise the smartphone industry, enabling devices to perform complex tasks with minimal human input. From language generation to predictive analytics, GenAI-capable smartphones will redefine user interactions and open up new possibilities for app developers.
For instance, these devices could provide hyper-personalised recommendations, automate routine tasks, and even adapt to individual user behaviours in real-time. Features like AI-generated photo enhancements, advanced virtual assistants, and real-time language translation are likely to become standard across mid-range and premium devices by the end of the decade.
The race to integrate GenAI into smartphones has intensified competition among manufacturers. Samsung, which led the market in 2024, gained an edge with its Galaxy S24 series, the industry’s first AI-centric lineup. The company’s focus on delivering AI-enhanced features helped it outperform rivals in key markets.
Apple, while maintaining its stronghold in the ultra-premium segment, faced challenges with the limited availability of its Apple Intelligence feature in the iPhone 16 series. However, the company remained competitive by leveraging its brand loyalty and making significant gains in emerging markets like Africa, Latin America, and Asia-Pacific.
Other players, including Xiaomi, OPPO, and Vivo, are also positioning themselves to capitalise on the growing demand for AI-driven smartphones. Xiaomi, in particular, recorded the fastest growth among the top five brands in 2024, due to its aggressive expansion efforts and portfolio realignment focused on premium devices.
According to the report, the smartphone market’s recovery from the disruptions of the COVID-19 pandemic and the global economic downturn has provided a strong foundation for this AI-driven transformation. By late 2023, the market had started showing consistent growth, with five consecutive quarters of positive performance recorded by the end of 2024.
Regions like Europe, China, and Latin America led this recovery, with consumers increasingly opting for premium and AI-enabled devices. This trend, according to Counterpoint Research, is expected to accelerate as economic conditions improve further and as smartphone makers introduce innovative features to attract tech-savvy buyers.
According to analysts, by 2028, the widespread adoption of GenAI is expected to reshape the competitive dynamics of the smartphone market. Companies that successfully leverage this technology to deliver innovative and accessible solutions will likely dominate the industry.
For consumers, the evolution of AI in smartphones promises a future where devices are not only tools but essential partners in managing work, entertainment, and daily life. As GenAI evolves, the smartphone may turn out to become the most intelligent and indispensable gadget in human history.
