Investment Prospects in the Smartphone Industry: AI Phones to Become the New Direction for Manufacturers in 2024
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Since the beginning of the year, with the emergence of video-based large models like Sora and Google's further iteration of models capable of handling higher text throughput, the evolution of AI large models is accelerating. This signifies that smartphones, as a crucial interface for human-computer interaction, will enter a new phase of development.
Huo Jinjie, President of IDC China, stated, "IDC predicts that starting from 2024, the new generation of AI phones will experience significant growth. It is estimated that the shipment volume of new-generation AI phones in the Chinese market will reach 37 million units in 2024 and 150 million units by 2027, with new-generation AI phones accounting for over 50% of the market share."
India's Smartphone Exports to Russia Increased 15-Fold in 2023
Analysis of data released by India's Ministry of Commerce and Industry shows that last year, India's smartphone exports to Russia increased by 15 times. In 2022, India's smartphone exports to Russia were valued at $6.1 million, and by 2023, this figure had surged to $97.3 million, marking a 15-fold increase.
Investment Prospects in the Smartphone Industry
As a type of mobile communication terminal device, smartphones began to emerge in the early 21st century, particularly after the release of the iPhone in 2007, which ushered in a period of rapid development for the entire industry. Smartphones not only retain the basic communication functions of traditional phones but also incorporate numerous high-tech elements such as touchscreens, operating systems, and application software, enabling users to enjoy richer, more convenient, and personalized services. In recent years, the global smartphone market has shown a steady growth trend. According to statistics, global smartphone shipments reached 1.21 billion units in 2022, representing an 11.3% year-on-year decline, yet the overall market size remains substantial. In the Chinese market, smartphone shipments reached 287 million units in 2022, marking a 14.1% decrease. This indicates that despite the slowdown in market growth, smartphones remain an indispensable part of people's lives.
The Chinese government has proposed the "Internet+" action plan, encouraging the integration of mobile internet, cloud computing, big data, and IoT with modern manufacturing to promote the transformation and upgrading of the electronic information industry. These policies have created a favorable environment for the development of the smartphone industry.
After years of rapid development, the global smartphone market is gradually becoming saturated. Major manufacturers need to seek new growth points, such as expanding into emerging markets or launching more differentiated products. With the rapid development of technologies like 5G, AI, and IoT, the smartphone industry is facing an unprecedented wave of technological innovation. Smartphone manufacturers must continuously innovate to meet consumer demands for higher performance, more convenient operation, and richer features.
Looking ahead, the smartphone industry still holds tremendous development potential. With the widespread adoption and application of technologies like 5G and AI, smartphones will further enhance performance and expand functionalities, offering users more convenient and intelligent life experiences. Meanwhile, as market competition intensifies and consumer demands continue to evolve, smartphone manufacturers need to innovate and improve constantly to adapt to market changes and meet consumer needs.
The Era of AI Smartphones In 2023, AI became a buzzword in the tech circle, attracting both new and established players. By 2024, its popularity continues to soar.
Since the emergence of ChatGPT sparked a new wave of global AI investment, most leading companies in various industries have been carefully laying out their strategies. An undeniable major trend is that AI is set to reinvent the vast majority of industries.
For quite some time, the smartphone industry has remained relatively low-key. However, given current trends, 2024 is highly likely to become the inaugural year of AI smartphones.
Looking back, since the second half of 2023, major smartphone manufacturers such as Huawei, Xiaomi, vivo, Samsung, OPPO, and Honor have been competing fiercely in the development of large AI models.
On the first working day after the 2024 Spring Festival, OPPO's founder and CEO Chen Mingyong issued an internal letter announcing the establishment of an AI Center to accelerate the concentration of resources in AI, fully preparing to drive rapid advancements in AI. In the era of AI smartphones, OPPO aims to become a leader and popularizer of AI phones.
On the morning of February 18, Meizu's official Weibo account announced its decision to go all-in on AI, discontinuing traditional "smartphone" projects. Meizu stated it would restructure Flyme OS based on AI strategy, create new AI terminal devices, fully open up to global large model teams, actively collaborate with top international teams like OpenAI, and build a new AI ecosystem.
At the beginning of the Year of the Dragon, smartphone manufacturers are vigorously pushing AI phones, seemingly indicating that 2024 will mark a new direction for the industry with AI smartphones at the forefront. Smartphone Industry Market Investment
The AI wave in the smartphone industry began in the second half of 2023, when both international and domestic manufacturers collectively entered the artificial intelligence (AI) battlefield in mobile communications. For instance, overseas brands like Google and Samsung, as well as Chinese manufacturers such as Huawei, Xiaomi, OPPO, and vivo, announced their participation in advancing generative AI (AIGC) applications in smartphones during that period.
According to Counterpoint Research, 2024 is expected to mark the first year of AI smartphones globally. The agency predicts that by the end of 2027, shipments of smartphones equipped with AIGC capabilities will exceed 500 million units.
With slow iterations in hardware technology, smartphone manufacturers find it challenging to win consumer favor through minor hardware upgrades. After all, the user experience between phones released years ago and the latest models is not significantly different.
TechInsights reports that in 2023, the global smartphone replacement cycle extended to a record high of 51 months, with many users still using models released four years ago.
The rise of large AI models in 2023 has shown smartphone manufacturers the potential for innovation in software experiences. On one hand, AI advancements could enhance smartphone software experiences, driving greater consumer demand. On the other hand, breaking free from the hardware competition cycle and seeking new differentiators could provide a competitive edge in the evolving market. The concept of 'AI+smartphones' has become a strong industry consensus in 2024, which is also referred to as the 'Year of AI Smartphones'. Under this wave, no smartphone company wants to miss the prosperity of this track.
In the fierce market competition, the ability of enterprises and investors to make timely and effective market decisions is the key to success. The smartphone industry report written by China Research Network provides a detailed analysis of the development status, competitive landscape, and market supply and demand situation of China's smartphone industry. It also analyzes the opportunities and challenges faced by the industry from the perspectives of policy environment, economic environment, social environment, and technological environment. At the same time, it reveals potential market demands and opportunities, providing accurate market intelligence and scientific decision-making basis for strategic investors to choose the right investment timing and for corporate leadership to make strategic plans. It also has significant reference value for government departments.