The super replacement trend of smartphones has not yet arrived, but the clash between technology giants is gradually becoming more intense.
In recent days, while people are discussing the differences between the iPhone 16 and its predecessor, the topic of Huawei's "triple screen phone" has once again emerged. Not only did the two launch events clash, but the product's release date was also scheduled for the same day.
The innovation track does not require humility. When Apple arrived late in the fields of foldable screens and AI, a new round of technological innovation competition around global smartphones has already begun.
According to the reporter's understanding, in the past year, not only in the field of foldable screens, mobile phone manufacturers from China have also been partnering with more large model companies to promote the implementation of AI strategies at home and abroad, even investing heavily in deploying AI to the operating system layer and reconstructing the underlying software and hardware systems of mobile phones. Among them, there are many AI giants at home and abroad, including ByteDance, Alibaba, Google, Meta and Microsoft.
In the view of analytical institutions, AI native applications built on generative AI will be the key to stimulating the growth of AI smartphones in the future. If AI native applications can reshape the existing habits of mobile Internet content consumption, it will have the opportunity to shorten the phone changing cycle.
Chinese mobile phone manufacturer 'outsources' Apple
When AI can be used on Apple phones is one of the focuses of attention for Chinese Apple users.
On the early morning of September 10th Beijing time, at the autumn product launch event, Apple successively updated three main hardware products: Apple Watch, AirPods, and iPhone. Multiple AI functions were integrated into its various product lines, including the affordable version of iPhone 16 series.
However, the launch time of AI functions varies in different regions. Apple announced that the beta version of Apple Intelligence will be released in the US version in October. By the end of the year, coverage will be extended to other localized English versions, and language versions such as Chinese, French, Japanese, and Spanish will be launched next year. Some industry insiders joked, "The iPhone 16 is here, but AI is still on its way
Apple has previously announced a partnership with OpenAI, but has not yet announced any artificial intelligence partners in China.
At the same time as the Apple press conference, some management teams from Chinese mobile phone manufacturers were also watching the live broadcast simultaneously. A relevant person from the Honor management team told reporters after the press conference that the AI mentioned by Apple is more about restructuring mobile applications at the system level, using "intelligent agents" to enable AI to achieve "autonomous driving" on mobile devices. But in fact, Chinese mobile phone manufacturers' deployment of AI is not slower than Apple's, and even faster, "the person said.
Three days before the Apple press conference, Honor announced its AI Agent strategy at the Berlin Consumer Electronics Show in Germany. The official stated that this is the industry's first cross application open ecosystem intelligent agent released globally and will be commercially deployed on the next generation of Honor flagship phones. The above-mentioned person from Honor said, "Actually, users don't need to wait for Apple to learn Chinese anymore. Chinese manufacturers have already launched similar layouts
In their view, AI agent smartphones require at least four abilities, including "natural semantic understanding and computer vision", "user behavior habit learning and scene environment perception", "intention recognition and decision-making", and "in app and cross app operation" capabilities. In other words, only based on understanding user habits and environmental perception of the current usage scenario, can we understand user needs and respond quickly, execute and retrieve various mobile resources, and meet user needs.
In addition to Honor, OPPO and Vivo will also update their AI progress in the second half of the year. Previously, two companies have successively released their own AI models.
Vivo insiders told reporters that Chinese mobile phone manufacturers are already exploring the landing scenarios of AI on mobile phones, covering language models, speech models, visual models, multimodal models, end-to-end models, and more. Huawei's "Pure Blood HarmonyOS" is planned to be launched in the fourth quarter, and the application of Pangu AI on mobile phones is also one of the focuses of attention for this operating system.
At this point, domestic smartphones will be updated to varying degrees before the arrival of Apple's AI intelligent agents, and analysis agencies believe that this will also drive the overall sales of AI smartphones.
According to data provided by Counterpoint, the penetration rate of generative AI smartphones is expected to reach around 43% by 2027. At the same time, the stock of generative AI smartphones will grow from only a million units in 2023 to 1.23 billion units in 2027. IDC believes that the shipment volume of AI smartphones in the Chinese market this year can reach 37 million units. The global shipment of AI smartphones will reach 170 million units, accounting for approximately 15% of the overall shipment of smartphones.
AI smartphones have arrived at a critical juncture
In the analysis data of major institutions, the AI smartphones released this year are mainly focused on high-end models, and mid-range smartphones will gradually be adopted thereafter. It is expected that by 2028, the proportion of AI smartphones will surge to 54%. This growth is mainly driven by consumers' demand for enhanced features such as AI assistants and edge processing.
In history, Apple has experienced two key super cycles: the first occurred in 2016, triggered by the large screen iPhone 6, and the second occurred in 2021, driven by the combination strategy of the iPhone 12/13 series and the rebound in demand after the pandemic. Counterpoint believes that Apple Intelligence will drive iPhone revenue growth in a tiered manner, rather than a single super cycle. The agency expects that by 2025, Apple's service revenue will exceed $100 billion, accounting for a quarter of its total revenue.
The reason for achieving this predicted volume is that AI smartphones have gone through multiple stages of development.
After Apple spent $200 million to buy the company that founded Siri in 2010, investment in AI phones had already begun. However, it was not until seven or eight years later that the "tags" of AI phones were widely used by mobile phone manufacturers around the world.
In 2018, Huawei shouted the slogan that smartphones would move from the "APP era to the AI era". Honor, which carries Huawei's AI strategy, has started to test the waters on the "Magic" phone model and is personally supervised by Xu Zhijun, a member of the executive team. At that time, Samsung also told the story of "visual recognition" on the Bixby platform equipped in the Galaxy S9, while executives from other domestic mobile phone manufacturers were frequently visiting research institutions in the United States and planning their own AI strategic plans.
At this time, the functions of AI on mobile phones are mainly focused on the APP stage. For example, various AI assistants, translation software, and image processing applications provide AI functionality through independent apps. These apps each have their own focus, and users need to install and open different apps to use AI services. With the development of AI technology, AI smartphones have entered the integration stage, and AI functions have begun to be integrated into other applications of smartphones. For example, AI beauty in camera applications and natural language processing in chat tools.
At present, the development of AI mobile phones has entered the system native stage, where AI technology is integrated into the native system of mobile phones, that is, the underlying software and hardware, and users obtain services through voice, text, and other forms. Multimodal AI technology enhances the ability of mobile phones to understand and process user needs, improves interaction naturalness and accuracy, and is more intelligent compared to the first two stages.
For example, at the press conference, Apple showcased the combination of AI and Apple's voice assistant Siri. Apple claims that Siri can now extract information from users' text messages and also allow Siri to send specific photos to designated users.
At present, this feature of Apple can already be implemented on Android phones. "Apple's own Siri can only mobilize the functions of Apple's native applications, and can't be linked with third-party applications such as WeChat and Alipay. We can activate the agent through voice commands, and realize the functions of automatic renewal, drink ordering, travel planning and ticket booking with one button." The glory staff told reporters.
The person in charge of another domestic mobile phone manufacturer also told reporters that with the application of AI in mobile phones, phones can begin to actively observe and understand users, predict weather conditions for business trips based on authorized positioning, and provide reminder functions. Mobile phones used to be just tools, but in the future they will become an external brain, no longer just a hardware state
In terms of functionality, firstly, at the level of human-computer interaction, with the support of LLM, new multimodal interaction will replace traditional, single touch screen interaction, gradually achieving a leapfrog transformation from graphical user interface (GUI) to voice user interface (VUI). Secondly, the combination of multimodal input and output capabilities can greatly enhance the productivity tool attributes of smartphones. It can generate charts, text, music, images, and even videos that users need based on various forms of input information, and can also edit the input images and videos. "Archie, an analyst in the smartphone industry at Counterpoint Research, told reporters that these new technological changes can gradually stimulate new demands in the consumer market.
But it can also be seen that the reasoning ability of AI chips at the hardware level and the interaction mode at the software level have put forward higher requirements for AI phones themselves, and the cost and technical solutions have come to a critical point.
Honor CEO Zhao Ming told reporters that the era of massive AI applications is coming, just like the current mobile app ecosystem, AI applications will also show a trend of fragmentation. What path should be taken to call these capabilities on the end side? This is also the biggest challenge that major mobile phone manufacturers will face in the near future.
For consumers, the future of AI is a variety of services. To some extent, it is not fundamentally different from today's apps. However, for mobile phone manufacturers, if they only package it at this level and claim it as their own, it is not a true AI phone. I believe the AI solution released by Apple will make the entire industry clearer. Is third-party AI translation yours? In fact, mobile phone manufacturers only integrate it, which cannot be said to be an AI phone. "Zhao Ming told reporters that a true AI phone should have the underlying interaction logic of" building intent recognition human-computer interaction ", which is the core of end AI.
Regarding the cost issue of AI smartphones, Chen Yiqiang, Deputy General Manager of the Wireless Communication Division of chip manufacturer MediaTek, told reporters that hardware costs will decrease with scale, but in the short term, due to insufficient application scale, it is impossible to form an effective business model on AI. Only when the platform side scales it up, hardware prices will come down.
We optimize our computing power at least 30% -50% of different costs every year, but there won't be a significant reduction in costs in the short term, "said Chen Yiqiang.
Neil Shah, Partner and Vice President of Research at Counterpoint Research, told reporters that integrating Intelligence into mobile devices is an expensive investment that requires significant R&D resources to develop and train models with billions of parameters. Neil Shah predicts that the commercialization of AI will become an inevitable trend, and in the future, mobile phone manufacturers including Apple may adopt various business models to address this challenge, such as charging developers or allowing users to pay for the use of advanced AI features.