2024 Mobile Industry Outlook: AI Large Models to Become Key Competitive Factor
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Recently, multiple Chinese smartphone manufacturers have deployed AI large models in phones or launched AI phones.
At last week's OPPO Developer Conference, its ColorOS14 operating system was officially unveiled. This system update marks the first built-in AndesGPT model, which includes various models ranging from 1 billion to hundreds of billions of parameters. The upgraded "Breeno Assistant" will possess AI large model capabilities.
Last month, vivo introduced its self-developed AI large model matrix, consisting of 5 models with parameter scales ranging from billions to hundreds of billions, comprehensively covering core application scenarios. The company also launched its first AI large model phone X100 this month, one of the industry's first phones to successfully deploy a 100-billion-parameter model on-device.
Additionally, Xiaomi Group Chairman Lei Jun announced that Xiaomi is fully embracing AI large models, with on-device large models already achieving initial operational success. Huawei announced integrating its Pangu large model into mobile systems, initiating public testing for its built-in voice assistant "Xiaoyi." Honor stated it will soon launch a self-developed 7-billion-parameter on-device AI large model and new cloud services.
The smartphone manufacturers' rush into AI large models is driven by both technological maturation and industry-led transformation. Key challenges include stimulating consumer demand during the electronics downturn and developing killer applications across ecosystems.
Mobile phones, originally just communication tools colloquially called "big brothers" in early days, are portable telephone terminals developed from battlefield mobile phones created by Bell Labs in 1940.
Mobile communication has evolved through 2G, 3G, and now 4G eras, with 5G commercialization already emerging in China.
In Q3 2023, China's smartphone market shipped approximately 67.05 million units, down 6.3% year-over-year.
With new product launches, replacement cycles, and year-end promotions, China's smartphone market is expected to rebound in Q4 2023, marking the first quarterly growth in nearly 10 quarters.
Among the top five smartphone manufacturers, Honor has regained the top position in China's domestic market with a 19.3% market share. Its three new foldable models significantly boosted its presence in the premium segment above $600, with its ultra-thin foldable design gaining widespread recognition. The X50 series became one of the most popular offline products due to its design, battery life, drop resistance, and optimized system performance.
OPPO ranked second in domestic shipments with a 16.2% market share. Its new Find N3 Flip series helped OPPO secure the top position in the clamshell-style foldable phone segment. The Reno 10 series maintained strong sales, stabilizing OPPO's offline market position in the $400-$600 price range. Sub-brand OnePlus continued triple-digit year-on-year growth, enhancing its competitiveness in the online $400-$600 segment.
Analysis of Future Trends in the Smartphone Industry
As a hybrid between smartphones and tablets, foldable phones have expanded large-screen usage scenarios and created differentiated form factors through upgraded designs, becoming a new focal point for the industry.
Consumers' increasing focus on quality and experience has given the premium market greater growth potential. Sales data from various platforms shows both horizontal foldables (with larger screens) and vertical foldables (with compact designs) performing well. According to IDC's quarterly tracker, China's foldable phone market maintained rapid growth in Q3 with 90.4% year-on-year shipment growth.
From pursuing longer battery life to delivering better audiovisual experiences, manufacturers are competing by specializing in niche areas, focusing on professional features, and improving product portfolios. The industry continues to cultivate new growth drivers through technological and form factor innovations.
With generative AI technology, smartphones will achieve more accurate user intent understanding and contextual awareness. However, deploying AI models on phones faces technical challenges including computing power chips, thermal management, and battery constraints. AI models will become crucial competitive differentiators for smartphone brands.
Despite overall market decline in China, the premium smartphone segment shows counter-trend expansion. As a key technology to unlock the premium market, AI has become a major focus for manufacturers. Beyond market share, their investments in AI models aim to compete in future smart ecosystems.
vivo's VP Zhou Wei noted three challenges in developing AI models: data, algorithms, and computing power - particularly the construction of large computing clusters. vivo has invested over 20 billion yuan in AI in recent years.
Integrating cloud and device to provide personalized application experiences; creating a self-controlled software ecosystem and service capabilities, enabling mobile applications to achieve 'a thousand faces for a thousand users.' Mobile manufacturers and various supply chain partners work together to promote continuous upgrades in the industrial chain.
An official from the Ministry of Industry and Information Technology stated that they will accelerate the implementation of policies such as the Steady Growth Action Plan for the Electronic Information Manufacturing Industry (2023-2024), promote progress in key areas such as communication equipment, smart hardware, and lithium-ion batteries, and accelerate the cultivation of new momentum. The goal is to achieve over 85% market share for 5G smartphones in China by 2024, with further improvements in the supply capacity of high-end products.