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Home AI: Technology, News & Trends AI Phone Landscape: Manufacturers Double Down as Consumers Remain Skeptical of Utility

AI Phone Landscape: Manufacturers Double Down as Consumers Remain Skeptical of Utility

AI mobile phone

Recently, major smartphone manufacturers have all stepped onto the stage, announcing their bets on AI (Artificial Intelligence) smartphone business.

On the evening of February 22nd, Xiaomi Group (01810.HK) unveiled “Xiaomi AISP” at the Xiaomi 14 Ultra launch event, which was upgraded from “Xiaomi Image Brain,” positioning it as the “first AI large-model computing photography platform.”

Materials provided by Xiaomi’s relevant personnel show that the Xiaomi AISP platform fully integrates CPU (Central Processing Unit), GPU (Graphics Processing Unit), NPU (Neural Processing Unit), and ISP computing power, capable of achieving a computational capability of 60TOPS (trillion operations per second, a unit of processor computing power), and providing “Super Snap” and “Super Negative” functions.

This is also Xiaomi’s first AI achievement released in 2024. At the mobilization meeting held in February 2024, Xiaomi’s founder and chairman Lei Jun set the company’s operational strategy for this year as “steady progress” and reiterated the six sub-strategies including the AI strategy.

Compared to Xiaomi’s “steady progress,” another smartphone manufacturer, Meizu, is much more aggressive.

At the beginning of the new year, Meizu announced the cessation of traditional “smartphone” new projects and fully invested in AI technology, “All in AI.” In addition to building AI systems and ecosystems, Meizu specifically mentioned restructuring hardware forms to create “AI Device products.”

In addition, at the Pocket 2 launch event on February 22nd, Huawei also announced the pioneering “AI Cloud Enhancement Technology,” and OPPO announced the establishment of an AI center… All signs seem to indicate that AI is becoming the key force driving the transformation of the smartphone industry in 2024.

“AI image processing is currently the most fiercely competitive area among major manufacturers and the easiest area to demonstrate AI advantages.” On February 22nd, a securities industry computer industry researcher told reporters that the most resource-intensive AI large models have not yet appeared with products or applications significant enough to shake the industry, requiring a longer observation period. “For consumers, the absolute advantage of AI phones is difficult to demonstrate in the short term.”

First-Line Mobile Phone Store Clerks: AI’s Appeal Is Not Strong Enough

In February, the emergence of Sora once again refreshed people’s understanding of AIGC. Following text and images, Sora, representing text-to-video technology, demonstrated its enormous potential to revolutionize the film and television industry.

In the mobile phone industry, “AI phones” are recognized as the “next generation of smartphones.” “AI phones will be the third major transformative stage in the mobile phone industry after feature phones and smartphones. In the era of AI phones, the mobile phone industry and user experience will undergo revolutionary changes.” Liu Zuohu, chief product officer of OPPO, said at an AI strategy conference on February 20th.

Compared to other hardware, the compact and portable nature of smartphones makes them the ideal carrier for AI. Guohai Securities pointed out in a research report that in terms of mobile phones, the development path is: emphasizing communication functions—smartphones—personal assistants. Mobile phones are closer to users’ lives than PCs, so users naturally have such demands.

Starting from the second half of 2023, AI smartphones equipped with AI large models began to land and be launched. The upgraded HarmonyOS 4.0 system announced its access to the Pangu large model and applied it to multiple system applications of Huawei phones; Samsung released the flagship Galaxy S24 series equipped with the edge AI assistant Galaxy AI, featuring video AI processing, AI chatbots, image processing, real-time translation during calls, and more; OPPO launched the world’s first 7 billion edge large model phone, Find X7 series, with AIGC elimination function and AI large model voice summary function.

But while manufacturers in the industry are hot on the topic, frontline mobile phone stores find it difficult to perceive AI’s impact on smartphone sales.

Latest reporters recently visited multiple mobile phone sales outlets, and in OPPO stores, promotional materials for the Find X7 series, such as posters, all feature slogans like “smarter AI large model,” but AI is not the sales focus of the clerks.

A clerk told reporters that customers are mainly concerned about photography, chips, screens, and other aspects, “We will actively introduce AI functions to customers, but few are interested. The attractiveness of AI is not strong enough yet.”

In Xiaomi, Honor, and other brand stores, AI does not appear in prominent areas. “In recent years, AI has been frequently used in promotions, and customers may have become indifferent to these terms,” a vivo store clerk said.

A customer who was shopping for a phone told reporters that in his opinion, AI phones do not have significant differences from other phones, “AI phones seem to have no special features, and I don’t usually use them.”

Is It A “New Generation of Phones” or “Marketing Gimmicks”?

What exactly is an AI phone? How does it differ from a smartphone? Currently, debates among various parties over the definition of AI phones and the technical route have cast a shadow on the popularization and promotion of AI phones.

In the eyes of ordinary consumers, smartphones equipped with large models can be called AI phones. Liu Zuohu said that true AI phones can more efficiently utilize computing resources, sensitively perceive the real world, have powerful self-learning abilities, and more abundant creative capabilities.

In the February 2024 report, AI phones were divided into hardware-empowered AI phones and new generation AI phones. Among them, the latter should be able to run edge GenAI (Generative AI) models on SoC (System-on-Chip) faster and more efficiently, and the performance of NPU using int-8 data type should be at least 30TOPS. According to this standard, currently only smartphones equipped with three SoCs including Apple A17 Pro, MediaTek Dimensity 9300, and Qualcomm Snapdragon 8 Gen 3 can be defined as new generation AI phones.

“AI phones have higher requirements for chips and hardware. Currently, large models on the mobile phone side are still in the initial stage, and there is still a gap compared to mainstream cloud-side large models such as Wenxin Yiyuan and Xinghuo large models. This is also caused by the small parameters of large models on the mobile phone side. In the future, the requirements of AI for mobile phone computing power, chips, and storage will increase day by day.” According to Latest, applications often have to wait until the hardware side matures before there is room for explosion, “It’s hard to see any disruptive applications appearing now.”

According to forecasts, the global shipment of new generation AI phones in 2024 will reach 170 million units, accounting for nearly 15% of the total shipments of smartphones, a significant increase from about 51 million units in 2023.

The emergence of AI phones is expected to inject a “shot in the arm” into the sluggish smartphone market. The imaginative space brought by AI phones injects marketing highlights into the smartphone market, which has been lacking new stories for a long time.

“Whether it’s AI image processing or voice assistants, they are still in the early stages, and the application scenarios are not mature enough. When edge large models truly mature, consumers may be able to perceive the advantages of AI phones.”

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