The semiconductor and smartphone industry stands on the brink of a transformative era, driven by the rapid integration of Generative AI (GenAI) technology into mobile devices.
According to the latest global market study by International Data Corporation (IDC), GenAI smartphone shipments are forecast to grow by 363.6 percent in 2024 alone, reaching 234.2 million units.
This surge represents 19 percent of the overall smartphone market. As we look toward the future, the adoption of GenAI is anticipated to redefine mobile device user interaction.
GenAI Smartphone Market Development
GenAI smartphones are defined by their ability to run on-device generative AI models efficiently, thanks to a system-on-a-chip (SoC) featuring a neural processing unit (NPU) with a performance capability of 30 tera operations per second (TOPS) or more, using the int-8 data type.
This technological advancement promises to enhance the mobile user experience by enabling more personalized and proactive GenAI tool functionalities directly on the device.
Despite challenges such as prolonged device refresh cycles and macroeconomic uncertainties, the allure of GenAI capabilities is expected to drive significant upgrades in the smartphone market.
The IDC study forecasts continued robust growth, with shipments increasing by 73.1 percent in 2025 and maintaining moderate double-digit growth rates through 2028.
By this time, GenAI smartphone shipments are projected to reach 912 million units, reflecting a compound annual growth rate (CAGR) of 78.4 percent from 2024 to 2028.
The IDC study highlights several key market dynamics:
- GenAI smartphones are expected to achieve over 60 percent market penetration within the first three years of introduction, marking a rapid rate of adoption.
- By 2026, mid-range devices are anticipated to incorporate GenAI technology, significantly broadening access and driving widespread adoption.
- The integration of GenAI will spur innovation in software apps.
While initial sales of GenAI smartphones may be concentrated in the flagship segment, the technology is expected to trickle down to more affordable models as competition among manufacturers intensifies and costs decrease.
This democratization of GenAI technology will be crucial in driving its widespread adoption and unlocking its full potential.
Several key trends will help to shape this growth market:
- As the cost of GenAI-capable chipsets decreases, mid-range and budget smartphones will increasingly feature this technology, broadening the market opportunity.
- The ability to run GenAI models on-device will lead to more personalized and context-aware user experiences, setting new standards for smartphone interaction.
- While GenAI use cases are still unfolding, potential applications include advanced photography, real-time language translation, and enhanced security features.
- As more manufacturers adopt GenAI technology, the competitive landscape will intensify, leading to rapid innovation and potentially lower prices for consumers.
Outlook for GenAI Smartphone Apps Innovation
With a significant upside growth trajectory from 2024 to 2028, the GenAI smartphone market offers substantial new revenue opportunities for device manufacturers.
"GenAI smartphones are inevitable and look to be the next big thing the industry has to offer consumers," said Anthony Scarsella, research director at IDC.
That said, I believe as GenAI semiconductors become more accessible and their applications more diverse, the next decade promises to be a period of transformation in the mobile sector.