• Gen AI enables hyper-personalization, will power more personalized experiences, reaching over 50% of global shipments by 2028.
• Premium brands lead: Samsung and Apple will dominate early GenAI smartphone adoption.
• Semiconductor demand rises: GenAI will increase semiconductor costs to 45% of smartphone BoM by 2030.

The emergence of GenAI is reshaping the smartphone industry drastically, shifting focus from hardware such as bigger screens, faster processors, and more cameras to delivering a more intelligent, adaptive and personalized user experience.

Although hardware advancements have slowed, innovation is still accelerating, with the industry evolving towards hyper-personalization – all powered by Generative AI.

It has been about a year since the launch of the first GenAI smartphone and the impact is undeniable. The shipment share of GenAI smartphones is forecast to reach 19% in 2024. By 2028, this share is expected to reach 54% with shipments surpassing 730 million units, more than 3x the projected levels in 2024, according to Counterpoint Research’s Smartphone 360 Service.

In 2024, Samsung and Apple are set to capture over 75% of the global GenAI smartphone market, mainly driven by their strong presence in developed markets and dominance within the premium segment. Both brands are leveraging their premium positioning to capture early adopters, particularly in developed regions where high disposable income and interest in new technologies drive demand for top-tier smartphones. Over the short-term, GenAI will rule the premium smartphone category while through the medium-term we expect it to expand in segments past mid-end devices.

Competition among smartphone OEMs will tighten further, shifting from a tussle based on specs to one based on delivering true personalization. The key for OEM differentiation will lie in the implementation of AI, and we are already starting to see this evolution of AI use cases. Current applications include enhanced imaging capabilities, translation features, improved app experiences, content recommendations, and personalized content creation.

The semiconductor sector will see substantial growth, reaching $339 billion by 2030, driven mostly by the adoption of on-device GenAI. Semiconductors are forecast to account for 45% of the smartphone bill of materials (BoM) by 2030, from the current 40%. Major contributors to the cost of semiconductors in smartphones include processors, memory, connectivity, power, sensors, and audio, with GenAI weighing the most on processors, followed by memory, sensors, and audio.

Qualcomm has been a critical driver of both smartphone shipment growth and experiences in the GenAI smartphone segment, enabling OEMs to deliver on the next generation of devices. Our Whitepaper, which is based on Qualcomm’s keynote delivered during our AI 360 Summit earlier this month, delves deeper into the growth of the overall market, as well as the technology and services that next-gen GenAI smartphones will deliver.