The news: The smartphone industry underwent an unprecedented AI shift in 2024 with manufacturers restructuring their latest handsets around on-device AI functionality.

As the most personal connected devices for billions of people, smartphones seemed like the perfect vehicle to grow generative AI (genAI) adoption. But initial missteps and AI product delays indicated that getting genAI into people’s hands is a difficult undertaking.

Smartphone companies embraced genAI: Google, Samsung, and Apple all ushered in genAI-capable smartphones in 2024. Rather than rely on standalone genAI chatbot apps, they integrated AI in photography, messaging, search, and video messaging.

• Google released new Pixel smartphones featuring Gemini genAI assistant, Call Notes—which transcribes phone calls and generates on-device conversation summaries, and an AI weather app.
• Apple introduced new iPhone 16 models in September, and Apple Intelligence features integrating ChatGPT into recent iPhones began rolling out in December.

AI device makers tried to kill smartphones but failed: The AI gold rush resulted in various AI device releases that aimed to separate users from their smartphones. This did not go as planned.

• Humane’s Ai Pin, the Rabbit R1, and to a lesser extent Ray-Ban Meta Smart Glasses promised a future beyond smartphones. However, most of these devices still require smartphones to access AI services.
• Early AI product releases resulted in disappointments, indicating that productizing AI for consumers was not yet ready for primetime.

What’s coming in 2025? 

• Samsung is reportedly combining its California and Toronto AI research centers into one division, and it became the first Google partner to integrate Gemini Pro and Imagen 2 with Vertex AI on smartphones.
• Android 16’s AI features, including enhanced Gemini integrations, are expected to make Android devices more savvy and spur more competition between the smartphone duopoly.

Key takeaway: 2025 will see the wider expansion of genAI in the smartphone market. However, it remains to be seen if the technology is compelling enough to force upgrade cycles. 

While competition in mobile AI could see a spike, phone makers have significant challenges to overcome, considering that 45% of US adults don’t intend to use AI features on their smartphones, per YouGov.

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