The 2024 Mobile World Congress trade show kicks off this week in Barcelona, Spain. Tech developers and chip designers are unveiling their latest generation of hardware, pivoting to the growing demand for AI devices.
IDC Research Director Nabila Popal joins Yahoo Finance’s Akiko Fujita to discuss consumer demand forecasts as artificial intelligence use cases continue to be fleshed out.
“The use cases have yet to be developed where that’s really going to create that mass consumption and run to… purchase the new AI device. That’s what we really are waiting for,” Popal says. “The smartphone industry is already on the cusp of recovery, but the question is are these AI devices really going to cause the next wave of super cycle refresh? Are they going the lead the boom or rather the recovery, but the answer to that is it’s really not a number, they’re still going to make up probably about 15% of the smartphone market this year…”
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor’s note: This article was written by Luke Carberry Mogan.
Video Transcript
AKIKO FUJITA: The Mobile World Congress kicking off in Spain today. The integration of generative AI in devices, a big focus in Barcelona. For more on what consumers can expect, let’s bring in Nabila Popal, IDC research director of consumer devices to break it all down. Nabila, good to talk to you today. We got a bit of a preview on what that experience is going to look like with AI in devices at CES earlier this year. What are the big headlines you’re expecting out of Barcelona this week?
NABILA POPAL: So certainly as you’ve all heard, no surprise, right? AI is the big, big buzzword. Five years ago, it was 5G, and before that, digital transformation. But this year, it’s all about AI. AI everywhere, AI and devices, AI in PCs, and certainly at Barcelona, AI in smartphones. So as of now, we’re seeing across the board, all vendors, OEMs, and industry players really push the agenda.
We’ve seen launch from Honor yesterday, which was really, really humming this AI message with their new Magic 6 Pro Series as well as their foldable phones. And that’s another segment that we expect to be booming. So certainly, this year, we are expecting AI devices or generative AI right on device to boom in the industry ramping up to about 170 million devices for this year.
AKIKO FUJITA: You mentioned Honor is one that has sort of unveiled their device. We, of course, have seen Samsung launch their AI device. Fundamentally, what has changed in terms of the smartphone experience right now as it stands as a result of that technology?
NABILA POPAL: Sure. You bring up a great point because it’s so confusing, right? There’s AI, then there’s generative AI, and then there’s next-gen, AI on device. So what does it all mean, really, at the end for the consumer? Because when you get into the technicalities of things, it can get confusing, right, like AI or generative AI on device must have large language models or must have stable diffusion and yada, yada yada.
But what does that really mean for the consumer? And I think if we want to hone down on what is the difference? So what is the difference from how AI has been a part of smartphones for a decade honestly until now to what’s happening today, right? What is the craze, whether it’s what Samsung announced earlier this year or now that’s going to be announced for the rest of the year? So what is the really–
AKIKO FUJITA: Specifically on gen AI though, what’s the difference?
NABILA POPAL: Exactly. And so that’s the word that we want to focus on. So generative AI and then on device. So generative means it’s not just smart or intelligent, but it can generate things. So it can create, whether it’s summarizing our tons of work emails or our family group chats. I mean, just giving some consumer examples that consumers can understand.
And also read more recently stuff like the Magic Eraser, like removing things from pictures or generating new pictures. It’s things like this that are still very early. The use cases have yet to be developed where that’s really going to create that mass consumption and run to purchase the new AI device. So that’s what we’re really waiting for. The smartphone industry is already at the cusp of recovery.
But the question is, are these AI devices really going to cause that next wave of supercycle refresh? Are they going to lead the boom or rather the recovery, right? But the answer to that is it’s really not a number. They’re still going to make up probably about 15% of the smartphone market this year with that 170 million number that forecast that I threw out earlier. So when are they really going to take off? And to some degree, it’s really– because they’re going to be–
AKIKO FUJITA: What does that target look like? What does that target look like? If it’s not this cycle with the devices that are being unveiled this year, when does that upgrade cycle really take off? And what are the brands that are best positioned?
NABILA POPAL: So I would start with honestly, like every single flagship launch this year and probably for the years to come is going to incorporate some element of AI experience, AI features. Right now, we would say all the flagship coming out of all the brands starting with Samsung this year.
Samsung’s certainly in a great position right now and all the Android players as well. Apple also pushed the message a bit towards the end of the earnings, although they haven’t really marketed anything with the AI message yet. But we’re eager to see what Apple comes out with at the end of this year.
But as of now, really, the Android players, starting with Samsung and then Honor. Xiaomi also had an event today, although they didn’t really drum the message too much. They focused more on camera specs, which is also a leading attribute that consumers are seeking and premium features, right? Premium part of the market is growing.
So we do see numbers taking off, but it’s really also because AI is really going to be embedded in the premium part of the market, which has been growing significantly. So it’s really a matter of when those AI features become mainstream that they will create that. We don’t see that happening– when the AI will become out of flagships into the mainstream devices, I think we’re still a few years out.
AKIKO FUJITA: Nabila Popal, IDC research director of consumer devices, good to talk to you today. Appreciate the time.
NABILA POPAL: Thank you very much.
Alex Mitchell is your go-to expert for all things mobile. With a passion for the latest smartphones, apps, and mobile innovations, Alex provides in-depth reviews, insightful analyses, and breaking news about the ever-evolving world of mobile technology. Stay connected with Alex to navigate the fast-paced realm of mobile devices.
