Analysis: Shoppers embrace AI in smartphone market

Smartphone manufacturers like Samsung and Google that efficiently market ‘halo’ synthetic intelligence (AI) options of their units can affect shopper behaviour. That is in keeping with the most recent Worldpanel ComTech research from Kantar, the advertising knowledge and analytics firm, which started monitoring AI as a driver for smartphone buying throughout its world markets in February 2024.

When Samsung, introduced that its new flagship Galaxy S24 collection can be ‘Powered by Galaxy AI’, it promoted a variety of AI options forward of the gadget’s newest {hardware}, suppose digital camera and display screen capabilities, through the launch occasion. In accordance with Worldpanel ComTech preliminary knowledge throughout European 5 (France, Germany, Nice Britain, Italy and Spain), US and in Australia (to February 2024) this advertising technique is already influencing shopper behaviour.  

One in 4 Galaxy S24 consumers mentioned that AI was a key motive they selected their cellphone (27 per cent amongst Australian consumers) in comparison with 6 per cent of all smartphone consumers. Amongst this group, 28 per cent needed real-time translation, 24 per cent needed digital camera enhancements and 17 per cent needed ‘circle to go looking’ (the place a picture is circled to set off an internet search) – all options which were closely marketed by Samsung forward of and through the launch.  

Google additionally introduced a variety of AI options in its newest Pixel 8 vary, with its 2024 Superbowl commercial selling ‘Guided Body’, an AI-generated audio cue to assist those that have poor visibility when taking pictures. Information reveals that this has had an influence on shopper motivation, with Pixel consumers over-indexing citing AI as a most popular characteristic over a standard smartphone.  

Commenting on the info, Jack Hamlin, World Client Insights Director at Worldpanel Division, Kantar, mentioned: “As extra smartphone producers develop, embed and efficiently persuade prospects of the advantages of generative AI, we are going to begin to see a shift in shopper consciousness and behavior. Whether or not AI will drive higher gross sales volumes will not be but clear, however shoppers motivated by AI performance will behave in a different way when shopping for a brand new gadget. What we might begin to see is producers packaging unique AI options into subscription affords, charging shoppers to entry them and constructing a brand new income stream.”

Apple, which developed and embedded its personal AI neural engine way back to 2017, is but to embed and promote ‘halo’ AI options in its units. Voice assistant Siri learns a consumer’s behaviour and gives ‘good prompts’, whereas the digital camera utility can determine folks and pets in pictures, but most shoppers are unaware that these are AI powered options. That is mirrored of their behaviour, with current iPhone consumers under-indexing -85 when looking for AI options vs the common smartphone.  

Will AI-powered improvements persuade smartphone shoppers?  

A lot because the gen AI hype, which began when ChatGPT creator, OpenAI, launched its generative AI chatbot again in 2022, has pushed world inventory markets to report highs. With smartphone gross sales volumes remaining down versus pre-pandemic stage at 30 per cent, producers are hoping that the know-how will give gross sales a elevate.  

Hamlin added: “Educating shoppers about AI options and the advantages they might convey can affect resolution making. However the query is whether or not shoppers would buy their handset anyway, and AI options solely providing a residual profit? With iPhone gross sales at a report excessive in most markets, Apple’s resolution to not rush into AI doesn’t look like affecting gross sales but. It is going to be fascinating to see how this performs out”. 

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