Smartphone Market Poised for a Comeback: AI Innovations Fueling New Growth
After enduring a decline, global smartphone sales are set to experience a resurgence starting in 2024. This optimistic forecast, from comprehensive reports by leading financial institutions Goldman Sachs and Morgan Stanley, challenges the prevailing narrative of a protracted slump in the mobile sector.
A shift in trends of reversing the decline
In its latest analysis, Morgan Stanley projects a promising upturn in the smartphone market. The firm anticipates a near 4% increase in global smartphone shipments in 2024, followed by a 4.4% rise in 2025. This prediction notably counters the downturn observed in the PC industry, suggesting a distinct trajectory for mobile devices.
Goldman Sachs’ positive projections
Echoing this sentiment, Goldman Sachs also foresees a reversal in the current market trend. The financial giant estimates a 5% year-on-year decrease in global smartphone volumes for 2023, bottoming at 1.148 billion units. However, it predicts a steady recovery from 2024 onwards, with shipments potentially climbing to 1.209 billion by 2025.
Driving forces behind the revival
A key factor in this anticipated revival is the integration of advanced on-device AI capabilities in smartphones. Morgan Stanley highlights the transformative potential of edge AI, which allows for significant advancements in features like enhanced photography and speech recognition, all while safeguarding user privacy.
Industry Leaders Betting on AI
Major players in the smartphone industry, including Apple, Vivo, Xiaomi, and Samsung, are already capitalizing on this AI trend. Vivo’s X100, equipped with on-device AI, has seen remarkable sales success. Xiaomi’s AI-powered flagship model recorded sales volumes six times higher than usual. Samsung, not to be left behind, plans to introduce built-in generative AI in its 2024 models, featuring ChatGPT-style capabilities processed directly on the devices, independent of cloud computing.
The hunt for the ‘killer app’
A significant challenge Morgan Stanley acknowledges is the uncertainty surrounding the development of a ‘killer app’ for edge AI. Drawing parallels to historical tech breakthroughs like the desktop and mobile internet, the emergence of such an application is often a catalyst for widespread adoption. Microsoft’s CoPilot, a potential PC AI killer app, could lay the groundwork for a similar breakthrough in smartphone AI.
A detailed analysis of Goldman Sachs
Goldman Sachs’ projections provide a nuanced perspective on the market’s future. While acknowledging the current slump, their analysts foresee a gradual return to the shipment levels of 2022 by 2025. Factors such as the holiday season, improved supply chain guidance, and new product launches are expected to contribute to this recovery.
The bigger picture: smartphones vs. PCs
The anticipated resurgence of smartphones diverges from the trajectory of personal computers, which have faced inertia and substitution threats over the past decade. Morgan Stanley emphasizes that smartphones continue to have shorter replacement cycles due to higher usage frequency and battery life constraints. Furthermore, the range of smartphone use cases is still expanding, particularly with the advent of Edge AI, suggesting continued market vitality in the face of emerging technologies like AR/VR.
A new wave of innovation
The global smartphone market, defying expectations of a prolonged downturn, appears set for a significant comeback. Integrating cutting-edge AI technologies into mobile devices is poised to unlock a new era of innovation, bolstering sales and rejuvenating the industry. As we approach 2024, the market is gearing up for this exciting transformation, driven by technological advancements and the promise of novel applications. This shift not only represents a resurgence in smartphone sales but also signals a new chapter in the evolution of mobile technology.
Read More
Smartphone Market Poised for a Comeback: AI Innovations Fueling New Growth
After enduring a decline, global smartphone sales are set to experience a resurgence starting in 2024. This optimistic forecast, from comprehensive reports by leading financial institutions Goldman Sachs and Morgan Stanley, challenges the prevailing narrative of a protracted slump in the mobile sector.
A shift in trends of reversing the decline
In its latest analysis, Morgan Stanley projects a promising upturn in the smartphone market. The firm anticipates a near 4% increase in global smartphone shipments in 2024, followed by a 4.4% rise in 2025. This prediction notably counters the downturn observed in the PC industry, suggesting a distinct trajectory for mobile devices.
Goldman Sachs’ positive projections
Echoing this sentiment, Goldman Sachs also foresees a reversal in the current market trend. The financial giant estimates a 5% year-on-year decrease in global smartphone volumes for 2023, bottoming at 1.148 billion units. However, it predicts a steady recovery from 2024 onwards, with shipments potentially climbing to 1.209 billion by 2025.
Driving forces behind the revival
A key factor in this anticipated revival is the integration of advanced on-device AI capabilities in smartphones. Morgan Stanley highlights the transformative potential of edge AI, which allows for significant advancements in features like enhanced photography and speech recognition, all while safeguarding user privacy.
Industry Leaders Betting on AI
Major players in the smartphone industry, including Apple, Vivo, Xiaomi, and Samsung, are already capitalizing on this AI trend. Vivo’s X100, equipped with on-device AI, has seen remarkable sales success. Xiaomi’s AI-powered flagship model recorded sales volumes six times higher than usual. Samsung, not to be left behind, plans to introduce built-in generative AI in its 2024 models, featuring ChatGPT-style capabilities processed directly on the devices, independent of cloud computing.
The hunt for the ‘killer app’
A significant challenge Morgan Stanley acknowledges is the uncertainty surrounding the development of a ‘killer app’ for edge AI. Drawing parallels to historical tech breakthroughs like the desktop and mobile internet, the emergence of such an application is often a catalyst for widespread adoption. Microsoft’s CoPilot, a potential PC AI killer app, could lay the groundwork for a similar breakthrough in smartphone AI.
A detailed analysis of Goldman Sachs
Goldman Sachs’ projections provide a nuanced perspective on the market’s future. While acknowledging the current slump, their analysts foresee a gradual return to the shipment levels of 2022 by 2025. Factors such as the holiday season, improved supply chain guidance, and new product launches are expected to contribute to this recovery.
The bigger picture: smartphones vs. PCs
The anticipated resurgence of smartphones diverges from the trajectory of personal computers, which have faced inertia and substitution threats over the past decade. Morgan Stanley emphasizes that smartphones continue to have shorter replacement cycles due to higher usage frequency and battery life constraints. Furthermore, the range of smartphone use cases is still expanding, particularly with the advent of Edge AI, suggesting continued market vitality in the face of emerging technologies like AR/VR.
A new wave of innovation
The global smartphone market, defying expectations of a prolonged downturn, appears set for a significant comeback. Integrating cutting-edge AI technologies into mobile devices is poised to unlock a new era of innovation, bolstering sales and rejuvenating the industry. As we approach 2024, the market is gearing up for this exciting transformation, driven by technological advancements and the promise of novel applications. This shift not only represents a resurgence in smartphone sales but also signals a new chapter in the evolution of mobile technology.
Read More