Artifical intelligence-powered smartphones take center stage at the 2024 Mobile World Congress

The upcoming 2024 Mobile World Congress trade show commences this week in Barcelona, Spain. Innovators in the tech industry and chip makers are revealing their most recent hardware advancements, adapting to the increasing desire for AI gadgets.

Nabila Popal, a Research Supervisor at IDC, joins Akiko Fujita from Yahoo Finance to converse about the projected consumer demands as the utilization scenarios for artificial intelligence continue to be developed.

“The scenarios where mass consumption will be unleashed due to purchasing the latest AI gadgets are still in the works. That is the tipping point we are anticipating,” Popal states. “While the smartphone sector is on the verge of recovery, the big question is whether these AI gadgets will spark the next surge of consumer demand. Will they trigger the boon or simply contribute to the recovery? The answer is not crystal clear, as they are projected to make up approximately 15% of the smartphone market this year…”

For additional expert perspectives and real-time market movements, click here to view the complete episode of Yahoo Finance Live.

Editor’s note: This article was penned by Luke Carberry Mogan.

Video Transcript

AKIKO FUJITA: The launch of the Mobile World Congress is happening today in Spain. The integration of generative AI in devices is the primary focus in Barcelona. To provide insights into what consumers can anticipate, let’s introduce Nabila Popal, IDC research director of consumer devices, to dissect the key elements. Nabila, nice to have this discussion with you today. We had a sneak peek of what the AI experience in devices would be like at CES earlier this year. What are the major news items you foresee from Barcelona this week?

NABILA POPAL: Unsurprisingly, as you all may have heard, AI is the trending term. Five years ago, it was all about 5G, and prior to that, digital transformation took center stage. However, this year, the spotlight is entirely on AI. AI is the buzzword everywhere, be it in devices, PCs, or smartphones specifically in Barcelona. Presently, we are witnessing all vendors, OEMs, and industry stakeholders driving the AI agenda.

We witnessed the recent release from Honor, which heavily emphasized this AI narrative with their latest Magic 6 Pro Series and foldable phones. Another booming segment we anticipate. Consequently, this year, we expect a surge in AI devices or generative AI directly on devices, scaling up to around 170 million devices for this year.

AKIKO FUJITA: You made mention of Honor as one of the companies that unveiled their device. Likewise, we have seen Samsung introduce their AI device. What fundamental shifts have occurred in the smartphone realm currently due to this technology?

NABILA POPAL: Certainly. You raised a valid point because the landscape can get convoluted with terms like AI, generative AI, and next-gen AI on devices. So what exactly does all this technical jargon mean for consumers in the end? It can get perplexing delving into the technical aspects, like AI or generative AI on devices necessitating large language models or stable diffusion, and so forth.

But what does this actually imply for consumers? If we narrow down to discern the disparity between how AI was integrated into smartphones over the past decade up until now, what is the present hype all about, whether it’s the recent Samsung announcement or what is expected for the remainder of the year? What exactly is the–

AKIKO FUJITA: Particularly regarding gen AI, how does it differ?

NABILA POPAL: Precisely. This is the term we should concentrate on – generative AI and on device. Generative signifies not just smart or intelligent but the ability to generate. It can create, be it summarizing extensive work emails or family group chats. Providing relatable consumer examples.

And more recently, innovations like the Magic Eraser for eliminating elements from images or generating new images. These are advancements still in the early stages. The utilization scenarios where this will truly drive mass adoption and purchasing excitement for the new AI gadgets are yet to materialize. That is what we eagerly anticipate. The smartphone sector is already on the brink of recovery.

Nonetheless, the query remains: will these AI devices indeed precipitate the next wave of radical upgrades? Will they steer the surge or simply aid in the recovery? The response is not entirely quantifiable. They are slated to represent roughly 15% of the smartphone market this year, in alignment with the previously mentioned forecast of 170 million devices. The question is when they will truly take off. To some degree, it’s genuinely–

AKIKO FUJITA: What is the envisioned timeline for that? If it doesn’t manifest in this cycle with this year’s device releases, when will that upgrade cycle truly begin? Which brands are best positioned?

NABILA POPAL: To begin with, practically every flagship release this year and likely in the years ahead will encompass some form of AI experience, AI attributes. Currently, we can affirm that all flagships launched by all brands, commencing with Samsung this year.

At the moment, Samsung is in a commendable position, alongside all Android players. Apple did touch upon the AI narrative slightly towards the end of their earnings report, although they have yet to prominently market any AI features. We are eagerly anticipating Apple’s forthcoming innovations by year-end.

Presently, the spotlight is on the Android players, kickstarting with Samsung followed by Honor. Xiaomi also held an event today, albeit they didn’t heavily promote the AI theme. They primarily focused on camera specifications, which are also a key attribute that consumers are seeking, along with premium features. The premium segment of the market is on the rise.

Hence, we foresee an upsurge in figures, mainly because AI will be deeply embedded in the premium section of the market, which has experienced substantial growth. So, it’s a matter of when these AI features transition from flagships to mainstream devices to instigate that. We don’t foresee this happening– when AI will transition from flagships to mainstream devices, we believe we are still a few years ahead.

AKIKO FUJITA: Nabila Popal, IDC research director of consumer devices, it was great engaging in this discussion with you today. Thank you for your time.

NABILA POPAL: Thank you very much.

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