The smartphone industry is moving towards hyper-personalization driven by generative artificial intelligence (GenAI). Just one year after the first GenAI-enabled phones were released, the impact is already significant. According to Counterpoint, GenAI smartphone shipments are expected to exceed 730 million units in 2028, more than three times the expected shipments in 2024. In 2028, 9 out of 10 smartphones priced above $250 will be GenAI-enabled, marking widespread adoption of GenAI. Hyper-personalization, which starts with high-end smartphones, will eventually expand to high-, mid-, and low-end devices as GenAI technology matures. In 2024 and 2025, the high-end smartphone market (wholesale price above $600) is expected to be the main driver of GenAI smartphone shipments, accounting for about 80% of total shipments. GenAI itself is unlikely to drive immediate upgrades due to a lack of compelling use cases compared to hardware advances, but this is expected to change as the technology develops. As OEMs continue to refine and promote GenAI capabilities, its appeal will grow. Initially, most of GenAI's applications will be concentrated in high-end smartphones, but by 2026 and 2027, it will expand to the high-end ($400-599) and upper-midrange ($250-399) markets. The high-end and upper-midrange markets are expected to account for about 30% of GenAI smartphone shipments in 2026 and 2027, driven primarily by Chinese brands. The smartphone industry is accelerating the democratization of GenAI by driving innovation in both hardware and software, making this technology more accessible even on lower-priced smartphones. Smartphone OEMs are actively promoting GenAI to enhance the overall user experience. They have even begun to provide software upgrades for older smartphones, giving users a glimpse of GenAI's capabilities. This momentum is expected to drive the adoption of GenAI in the sub-US$250 market in 2027 and 2028, further driving shipment growth. As GenAI continues to develop, it will enable more personalized and compelling use cases for smartphones. |
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