The concept of "AI at the edge" redefines how artificial intelligence is delivered. Rather than relying exclusively on centralized servers in the cloud, edge AI moves inference directly onto local devices where data and information are processed.
Worldwide end-user spending on Generative AI (GenAI) smartphones is set to reach $298.2 billion by the close of 2025, according to the latest market study by Gartner.
This milestone signals robust growth in digital hardware sales with a shift in how mobile technology is evolving to meet the demands of a more AI-dependent, experience-driven marketplace.
Smartphone AI Market Development
Smartphones have long stood at the center of the modern connected life. Now, the integration of GenAI marks a new era where devices transition from reactive tools to proactive intelligent companions.
Gartner’s study draws a clear line between traditional smartphones and GenAI smartphones — those equipped with dedicated neural engines (NPUs) able to run small language models (SLMs) directly on the device.
The implications are profound, introducing the ability for real-time, on-device AI processing that enables advanced conversational features, multimodal interactions, and context-aware recommendations, all without constant dependence on cloud connectivity.
Market Growth and Key Statistics
- Worldwide end-user spending on GenAI smartphones could represent 20 percent of total AI-related consumer spending in 2025.
- This spending is expected to surge by 32 percent to $393.3 billion in 2026, marking the fastest growth segment within AI-enabled hardware.
- By 2029, Gartner projects that 100 percent of premium smartphones will feature GenAI capabilities, effectively making advanced machine learning a universal standard.
- In 2025, nearly all new premium GenAI smartphones could include NPUs; the adoption rate for basic smartphones will be 41 percent for models featuring NPUs.
- By 2027, performance benchmarks for NPUs in premium GenAI smartphones are expected to exceed 40 tera operations per second (TOPS), unlocking real-time multimodal AI workloads while maintaining energy efficiency.
These stats reflect a potent convergence of smartphone user demand, vendor investment, and rapid innovation. Mobile device manufacturers are integrating GenAI models across both premium and mid-tier lines, betting that on-device intelligence will be central to the user experience.
Trends Shaping the GenAI Smartphone Market
- Integrated On-Device Intelligence: Smartphone vendors are leveraging NPUs to shift processing from the cloud to the device itself, enabling privacy-preserving, low-latency AI tasks and truly personalized experiences.
- Performance-Driven Upgrades: The push for more robust NPUs is generating a hardware upgrade cycle, as consumers seek out devices capable of supporting AI features, from real-time voice assistants to complex multimodal applications.
- The Ubiquity of Conversational AI: As generative AI models grow more sophisticated, natural language interfaces will replace static menu-based or touch interactions, driving the shift toward hands-free, context-aware smartphone usage.
For example, consider a scenario where a GenAI smartphone recognizes a user’s work pattern and proactively suggests scheduling changes or content creation assistance, streamlining workflows directly from the device.
Premium and basic GenAI smartphones will both increasingly enable such advanced use cases, elevating the phone’s role from a communication tool to an intelligent collaborator.
Outlook for Smartphone AI Application Growth
As NPUs become standard, and models become more efficient, both consumer and enterprise device users will benefit from AI-powered mobility — driving new app ecosystems, vertical integrations, and even adjacent revenue streams in health, commerce, and productivity.
By 2026 and beyond, widespread adoption will likely accelerate innovation cycles across the smartphone market. Gartner’s forecast underscores not only sustained revenue growth but also an industry-wide pivot toward AI-first product strategies.
"The broad use of new NPUs in smartphones will allow GenAI models to run faster and more efficiently, requiring users to upgrade to the latest smartphone hardware for optimized experiences," said Ranjit Atwal, senior director analyst at Gartner.
That being said, I believe the vendor opportunity for differentiation lies in delivering an adaptive user experiences that harness device-based intelligence for both daily tasks and emerging use cases, including content creation, real-time translation, and smart app automation.