April 20, 2024

Smartphones with AI in the focus of Mobile World Congress 2024

The Mobile World Congress 2024 trade show begins this week in Barcelona, ​​Spain. Technology developers and chip designers are introducing their latest generation of hardware, catering to the growing demand for artificial intelligence devices.

IDC Research Director Nabila Popal joins Yahoo Finance’s Akiko Fujita to discuss consumer demand forecasts as AI use cases continue to develop.

“The use cases have not yet been developed where that will actually create that mass consumption and run to… buy the new AI device. That’s what we’re really waiting for,” Popal says. “The smartphone industry is already on the cusp of recovery, but the question is: will these AI devices really cause the next super cycle upgrade wave? Will they lead the boom or rather the recovery, but the answer en It’s not really a number, they will still represent around 15% of the smartphone market this year…”

For more expert insights and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor’s Note: This article was written by Lucas Carberry Mogan.

Video transcript

AKIKO FUJITA: The Mobile World Congress starts today in Spain. The integration of generative AI in devices, a great focus in Barcelona. To learn more about what consumers can expect, let’s talk to Nabila Popal, director of consumer device research at IDC, to break it all down. Nabila, it’s a pleasure to speak with you today. We got a little sneak peek at what that on-device AI experience will be like at CES earlier this year. What are the big headlines you expect from Barcelona this week?

NABILA POPAL: So, as you’ve all heard, it’s no surprise, right? AI is the big buzzword. Five years ago it was 5G and before that, digital transformation. But this year it’s all about AI. AI everywhere, AI and devices, AI on PCs and, without a doubt, in Barcelona, ​​AI on smartphones. So as of now, we are seeing that across the board, all the suppliers, OEMs and industry players are really driving the agenda.

Yesterday we saw the launch of Honor, which really hummed this AI message with its new Magic 6 Pro series, as well as its foldable phones. And that’s another segment that we expect to be booming. Without a doubt, this year we expect AI devices or directly on-device generative AI to grow in the industry, reaching around 170 million devices by this year.

AKIKO FUJITA: You mentioned that Honor is one of those that has presented its device. Of course, we have seen Samsung launch its AI device. Basically, what has changed in terms of the current smartphone experience as a result of that technology?

NABILA POPAL: Sure. You bring up a great point because it’s very confusing, right? There’s AI, then there’s generative AI, and then there’s next-generation on-device AI. So what does all this really mean in the end for the consumer? Because when you get into the technical aspects of things, it can get confusing, right? Like on-device AI or generative AI has to have big language models or it has to have stable diffusion and yada, yada yada.

But what does this really mean for the consumer? And I think if we want to perfect, what’s the difference? So what’s the difference between how AI has been a part of smartphones for a decade and until now, honestly, with what’s happening today, right? What’s the trend, whether it’s what Samsung announced earlier this year or what will be announced now for the rest of the year? So what is it really…?

AKIKO FUJITA: However, specifically in the generation of AI, what is the difference?

NABILA POPAL: Exactly. And that’s the word we want to focus on. So generative AI and then on-device. So generative means that it is not only intelligent or intelligent, but it can also generate things. So you can create, whether it’s summarizing our tons of work emails or our family group chats. I mean, just give some consumer examples that consumers can understand.

And also read more recent stuff like Magic Eraser, like removing elements from images or generating new images. It’s things like this that are still very early. The use cases where that will actually create that mass consumption and rush to buy the new AI device have not been developed yet. That’s what we’re really waiting for. The smartphone industry is already on the cusp of recovery.

But the question is: will these AI devices really cause the next supercycle upgrade wave? They are going to lead the boom or rather the recovery, right? But the answer is that it’s not actually a number. They’ll probably still make up around 15% of the smartphone market this year with that 170 million figure I predicted I threw out earlier. So when are they really going to take off? And to some extent, it’s really… because they’re going to be…

AKIKO FUJITA: What is that objective like? What is that objective like? If it’s not this cycle with devices coming out this year, when does that refresh cycle actually start? And which are the brands that are best positioned?

NABILA POPAL: So I would start honestly, like all the flagship releases this year and probably in the years to come will incorporate some element of the AI ​​experience, AI features. Right now, we’d say all flagships from all brands, starting with Samsung this year.

Without a doubt, Samsung is in a great position right now and so are all the Android players. Apple also pushed the message a bit towards the earnings end, although they haven’t marketed anything with the AI ​​message yet. But we’re excited to see what Apple will release later this year.

But as of now, really, Android players, starting with Samsung and then Honor. Xiaomi also had an event today, although they didn’t really push the message too hard. They focused more on the camera specifications, which is also a main attribute that consumers look for and premium features, right? The premium part of the market is growing.

So we see the numbers taking off, but it’s actually also because AI is really going to be integrated into the premium part of the market, which has been growing significantly. So it’s really a question of when those AI features become widespread for them to create. We don’t see that happening: I think AI is still a few years away from going from a flagship to a mainstream device.

AKIKO FUJITA: Nabila Popal, Director of Consumer Devices Research at IDC, it’s a pleasure to speak with you today. Appreciate the time.

NABILA POPAL: Thank you so much.

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