Consumer Interest in GenAI Smartphones Remains Low

The International Data Corporation (IDC) has released a report highlighting consumers' lukewarm response to smartphones equipped with Generative AI (GenAI) capabilities. The research indicates that a combination of limited consumer awareness and the absence of essential features has contributed to the tepid demand for these advanced devices.

According to Nabila Popal, IDC's Senior Research Director, although GenAI remains a key focus for many smartphone manufacturers, it has not yet seen a significant impact in terms of driving consumer demand or prompting early device upgrades. Popal commented, "While GenAI continues to be a hot topic and key priority for many vendors, it is yet to influence demand significantly and drive early upgrades."

She further expressed optimism about the potential of GenAI technology. "We believe GenAI will revolutionize the user experience in the coming years; however, there is a pressing need for increased investments to enhance consumer awareness and introduce a compelling feature that would motivate consumers to rush to stores and generate the anticipated upgrade cycle," she stated.

The potential future landscape for GenAI smartphones appears promising. Popal forecasts that these devices will secure a spot in premium flagship models and gradually become more accessible across different price tiers, ultimately commanding up to 70% of the smartphone market by the year 2028.

Smartphone Shipments Forecast

As part of its analysis, IDC projects that approximately 1.24 billion new smartphones will be shipped globally in 2024, marking a 6.2% increase compared to the previous year. This surge in shipment is attributed to strong pent-up demand for device upgrades following several years of declines.

The report highlights significant growth in Android devices, which is expected to rise by 7.6% year-on-year, particularly in regions such as Asia Pacific (excluding Japan and China), Latin America, the Middle East, Africa, and China. Most of this growth is anticipated in the low-end device market.

Challenges for iOS Devices

In contrast, Apple’s iOS platform faces a less favorable outlook. The market share for iOS is estimated to grow by only 0.4% in 2024, although an increase is expected in 2025. IDC notes that while Apple has reported strong performance in emerging markets, including India, it is encountering challenges in larger markets such as China, the United States, and Europe.

Despite the sluggish growth forecast for 2024, IDC predicts a turnaround for iOS in 2025, estimating a year-over-year growth of 3.1%, surpassing Android's projected increase of 1.7% during the same period.

Growth Projections Beyond 2024

The IDC report mentions that even though 2024 is poised for a recovery in smartphone shipments, growth rates are likely to decline to low single digits from 2025 onward. The combined annual growth rate (CAGR) from 2023 to 2028 is projected at 2.6%. Several factors contribute to this slowdown, including increasing smartphone penetration, longer refresh cycles, and competition from a rapidly expanding used smartphone market.

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