OEMs push for GenAI in flagship smartphones, do we really need it

Global players like Samsung, Google have already launched premium smartphones, such as Google Pixel 8, Samsung S24 Ultra, with on-device GenAI features, Chinese manufacturers are also following suit

Original equipment manufacturers (OEMs) are focusing on integrating Artificial Intelligence and generative AI (GenAI) features into smartphones, especially flagship devices.

According to a Counterpoint study, the share of GenAI-enabled smartphones is expected to reach 40 per cent and surpass half a billion shipments globally by 2027.

Global players like Samsung and Google have already launched premium smartphones, such as the Google Pixel 8 and Samsung S24 Ultra, with on-device GenAI features, and Chinese manufacturers are also following suit.

OPPO recently joined this trend, revealing its plans to introduce GenAI features in its Reno 11 series smartphones.

While manufacturers are embracing this trend, tech analysts believe that on-device GenAI is still in an exploratory phase and serves mainly as a differentiating factor for premium smartphones.

"For now, AI smartphones are more in an exploratory phase, everything is being figured out and at times we may also feel that these features are not adding any value and are cosmetic,” said Faisal Kawoosa, Chief Analyst and Founder of Techarc.

“GenAI is just becoming one of the key differentiators to premiumise the devices,” he added.

The deployment of on-device AI capabilities improves the smartphone user experience, but OEMs should proceed cautiously as AI hype could lead to overpromising and under-delivering, according to a Gartner analyst.

He further suggests that AI features present an additional income opportunity for manufacturers to earn a premium from subscriptions.

“What you don’t see is a killer app because of AI. However, you may see a new level of service being offered due to AI, which could potentially lead to another source of income through subscriptions,” said Ranjit Atwal, Senior Director Analyst at Gartner.

Experts attribute the increasing adoption of AI in phones to continued stagnation in hardware innovation and smartphone demand.

According to the International Data Corporation (IDC), India’s smartphone market shipped 146 million smartphones in 2023, with a nominal 1 per cent year-on-year growth.

Companies aim to integrate GenAI to differentiate their products from competitors in order to attract customers in the current market conditions, say tech analysts.

GenAI-enabled smartphones require substantial computing power to perform on-device tasks.

The latest Snapdragon 8 Gen 3 processor used by Samsung for its S24 Ultra can support GenAI models with up to 10 billion parameters on-device, according to Qualcomm.

This level of computing power necessitates powerful chips and extensive research and development, which in turn affects the average price of a smartphone and reduces the likelihood of seeing this technology in mid-range devices in the near future, say tech analysts.

Upasana Joshi, Research Manager at IDC, states that the expansion of the smartphone market in India relies on the growth of the lower-end or entry-level price segment. However, next-generation AI devices are still distant from this segment and thus unlikely to exert any significant influence.

“This technology for now will dominate the premium end of the market, which has significantly grown over the past year or so,” she added.