GenAI smartphone share to grow 4X, exceeding 550M units by 2027

GenAI smartphone share of overall smartphone shipments will reach 11% by 2024 and 43% by 2027 to pass 550 million units in 2027 with 4X growth, according to an upcoming report, ‘GenAI Smartphone Shipments and Insights’, from Counterpoint Research’s Smartphone 360 Service. We expect the GenAI smartphone installed base to cross 1 billion by 2027. Against the backdrop of Apple’s anticipated entry into the segment later this year, these estimates are higher than Counterpoint’s earlier forecast of December 2023.

Counterpoint Research defines the GenAI smartphone as a mobile device that leverages large-scale, pre-trained generative AI models to create original content or perform contextually-aware tasks. We expect such devices to have multimodal capabilities, allowing them to process text, image, voice and other inputs to generate a variety of output and enable a user experience that is fluid and seamless. We expect the hardware specifications of such devices will likely evolve as the technology advances. But at present, a device should have hardware capabilities that are comparable to or exceed the performance of current flagship smartphones to effectively run generative AI models.

Research Director Tarun Pathak said, “More than 10 OEMs have launched over 30 GenAI-capable smartphones so far. AI in smartphones has been a key talking point since the start of this year, especially after the successful debut of the Galaxy S24 series, where Samsung has gained good mind share in marketing early AI use cases. We expect Samsung to lead GenAI smartphone OEM rankings in 2024. This is the second trend in the past couple of years where Samsung enjoyed an early-mover advantage; the first one being success of its foldables. The AI advantage will provide Samsung momentum in the mid-to-premium smartphone segment as GenAI features get recognized more broadly in coming years.”

Pathak added, “Apart from Samsung, Apple’s anticipated entry in the space will further help the segment’s growth. Once Apple enters, we expect AI to immediately become a must-have feature in all mid-to-premium smartphone launches starting 2025. However, the real differentiation will lie in the use cases as consumers are still evaluating potential impact of AI in their future devices.”

Associate Director Mohit Agrawal said, “Smartphones of the future will be more personalized to cater to individual needs and preferences, and AI will play a central role in driving these personalized experiences. As OEMs differentiate themselves on AI positioning, the key here will be the evolution of AI use cases. Currently, these use cases include enhanced imaging capabilities, translation features, improved app experiences, content recommendations, creating more personalized content, and more. These use cases will evolve as the large language models (LLMs) will continue to grow in both size and efficiency. Counterpoint believes that the integration of edge (mobile devices) and cloud will be the mainstream model for generative AI in smartphones, and OEMs with an equally strong play in software capabilities, along with strategic industry partnerships, are likely to stay ahead of the competition.”

Going forward, we expect GenAI smartphones to hit an inflection point in 2025 as the devices permeate the broader price segments, especially the $400-$599 price tier. The ≥$600 and $400-$599 price bands will account for 9 out of every 10 GenAI smartphones sold in 2024. Leading chipset companies such as MediaTek and Qualcomm have already taken the lead in embracing generative AI smartphones. They have launched several mobile computing platforms that support multimodal large AI models on devices. We expect Qualcomm to lead in the AI SoC space in 2024, capturing almost half of all GenAI smartphone shipments, followed by MediaTek with a 13% share. Counterpoint Research