Can Apple and Samsung's AI Innovations Spur Smartphone Sales Growth in 2024?

Apple Inc AAPL, along with other smartphone makers like Vivo, Xiaomi Corp XIACF XIACY, and Samsung Electronics Co, Ltd SSNLF, are set to see a resurgence in smartphone sales starting in 2024, countering the narrative of an extended slump in the mobile sector. 

This optimistic forecast comes from analyses by Goldman Sachs and Morgan Stanley. Morgan Stanley projects a nearly 4% global increase in smartphone shipments in 2024, followed by a 4.4% rise in 2025. 

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New on-device AI capabilities will likely drive the growth, which could stimulate demand through advancements in photography, speech recognition, and user privacy, TechCrunch reports.

The introduction of AI features is already showing promising results. Vivo's AI-powered X100 experienced explosive sales, and Xiaomi's AI-integrated flagship model reported sales six times higher than usual. 

Samsung plans to include generative AI in its 2024 models, providing ChatGPT-like functionalities directly on the device without relying on cloud processing.

Morgan Stanley notes the uncertainty regarding the emergence of a 'killer app' for Edge AI but suggests that a breakthrough could follow historical patterns seen in desktop and mobile internet. 

Microsoft Corp's MSFT CoPilot might set a precedent for smartphone AI applications.

While predicting a 5% drop in global smartphone volumes for 2023, Goldman Sachs anticipates recovery in 2024 and 2025. 

Shipments are forecasted to rise to 1.186 billion in 2024 and 1.209 billion in 2025. 

This rebound contrasts with the belief that smartphones could face the same stagnation challenges as personal computers. 

According to Morgan Stanley, smartphones are not at a similar risk of being replaced by other technologies like AR/VR, primarily due to their shorter replacement cycles, higher frequency of use, and expanding use cases, particularly with the advent of Edge AI.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.