Next-gen smart handsets talk up a storm

What's new about next-generation artificial intelligence-based smartphones?

While AI smartphones with features like Apple's voice-activated assistant Siri have been part of our daily lives for years, the new AI phone buzz is something else.

So, is it a fad or a real technology trend that will underpin big changes going forward?

This is the question that will flood into consumers' minds when they become overwhelmed by advertisements for AI smartphones.

It is true that AI within smartphones isn't entirely novel. Some aspects of AI, such as background blur effects on smartphones and picture editing, have been in devices for years. Even chatbots such as Siri are very familiar to us. They have been part of smartphones in the form of natural language processing and computational photography.

What's truly groundbreaking is the emergence of large language models and generative AI.

These models — trained on massive data sets — power applications like chatbots, enabling them to produce humanlike text or images based on user input.

Unlike traditional chatbots, which merely respond to queries, generative AI empowers them to create content like poems or meeting summaries. Moreover, advancements in on-device AI mean that more processing tasks can be handled directly on the device itself, rather than relying on cloud computing. This shift improves security, unlocks new applications and enhances processing speed, as all computations are performed locally.

US market research company International Data Corp has categorized next-generation AI smartphones as phones that can specifically perform on-device generative AI through the inclusion of LLMs and text-to-image models, among others.

However, just as loading a game on a PC does not make it a gaming PC, putting an LLM or two on a smartphone does not make it a next-gen AI smartphone.

It becomes one only when the smartphone's chip is designed with specific accelerators, or specialized processor cores, that are optimized to run LLMs quickly and efficiently with less power consumption, than if the main processor cores are the primary workhorse. These specialized cores are typically known as neural processing units.

Experts said the sales of many nextgen AI smartphones in the first year or two will likely be driven by the sheer fact that they are flagship phones. However, the arrival of phones capable of running generative AI on the device will lead to more application development, and next-gen AI smartphones will become increasingly capable.

A later evolution could include a very large AI model that is a more personalized and proactive assistant. And this is where the excitement of consumers and the industry really comes into play, at the untapped potential of what this technology could bring in the next phase of evolution, rather than the basic applications and use cases that exist today.

Ben Wood, chief analyst at market research company CCS Insight, said that in the future, smartphone manufacturers will strive for "anticipatory computing", where AI learns user behaviors to enhance device intuitiveness. This concept entails AI predicting user actions seamlessly, requiring minimal input from the user.

Despite the rosy picture, the reality is not that fancy now. The AI smartphones available on the market have features that don't exceed public expectations, as on-device generative AI is still in its infancy. Most of the attention-drawing demonstrations still rely on computing power from the cloud, experts said.

As a result, it is not so realistic to bank on new-generation AI smartphones to give a strong, and immediate boost to the global consumer electronics industry. IDC forecast that generative AI smartphones will not bolster smartphone demand until 2027.

After all, the global smartphone market just recorded its first quarter of growth in the fourth quarter of 2023 after nine consecutive quarters of declines. In 2024, worldwide smartphone shipments are expected to grow 4.2 percent, totaling 1.2 billion units year over year, Gartner said.