Samsung Creates AI Moment for Reviving Global Smartphone Business

Tech giant Samsung has taken the smartphone world by storm with the launch of its AI-powered Galaxy S24 series at the Galaxy Unpacked event held at the SAP Center Arena in San Jose, US.
Galaxy S24 Ultra devices with Corning Gorilla Armor cover materialAnisha Bhatia, Senior Technology Analyst at GlobalData, a renowned data and analytics company, offers insights into the groundbreaking Galaxy S24 series, particularly highlighting the integration of Galaxy AI, Samsung’s venture into the realm of artificial intelligence (AI).

Samsung stands out, and the introduction of Galaxy S24 series with Galaxy AI is hailed as the company’s significant AI moment. With AI emerging as a prominent buzzword in recent times, Anisha Bhatia emphasizes its role as a crowd-facing attribute that enhances the overall user experience. Samsung, with its vast resources and market presence, is well-positioned to effectively market this feature and raise awareness about the potential of edge-AI use cases.

The focus on on-device AI is noted for bringing internet-independent search capabilities to mainstream phones while ensuring more personalized and private data handling. Unlike cloud-based processing, on-device AI keeps the data on the device, aligning with growing concerns around privacy. Anisha Bhatia draws a parallel with Samsung’s earlier influence in jumpstarting the 5G phone upgrade cycle, predicting a similar impact with the introduction of on-device AI phones.

The benefits of Galaxy AI are anticipated to be more tangible to consumers compared to the less visible advantages of 5G technology. As users engage more with AI, the system is expected to evolve and offer enhanced features with emerging use cases. Anisha Bhatia underscores the strategic decision to incorporate AI into devices integral to consumers’ daily lives.

Samsung’s commitment to delivering cutting-edge features is evident in the updated hardware and AI photo editing capabilities of the new phones. The S24 Ultra, in particular, promises an elevated camera experience. To sweeten the deal, Samsung is offering double the base data storage with preorders, although the S24 Ultra is priced $100 higher than its predecessor, the S23 Ultra. Aggressive carrier promotions, including substantial discounts of up to $1,000 off the sales price across the S24 series, are expected to bolster device sales.
Share of Apple and Samsung in 2023 IDC report
The above chart indicates that smartphone market share of Samsung vs Apple during the year 2023.

Anisha Bhatia points out that the rise of on-device AI may lead to an increased demand for power-hungry devices, potentially driving higher phone upgrade rates. This trend is seen as advantageous not only for device manufacturers but also for carriers, as premium phones often pave the way for upselling expensive service plans to consumers.

The collaboration between Samsung and Apple in delivering 5G phones is identified as a key driver for carriers looking to upsell high-end service plans, contributing to the mainstream adoption of 5G services. According to GlobalData, 5G mobile service revenues in North America are projected to reach $195.7 billion by 2026.

Samsung’s decision to release of its highly anticipated Galaxy S24 series smartphones with cutting-edge AI functions will be positioning itself as a formidable competitor to Apple’s dominance in the premium smartphone segment.

This strategic move comes after Apple surpassed Samsung in smartphone shipments in 2023, according to data provided by the International Data Corporation. It marked the first time Apple had outperformed Samsung since 2010, as the demand for premium devices, an area where Apple holds a significant stronghold, surpassed overall market growth.

Among the key features is a two-way voice translation in real-time during live phone calls conducted in different languages. The on-device AI function supports 13 languages and is powered by Samsung’s proprietary generative AI training.

Other notable AI features include the innovative “circle-to-search” function, allowing users to circle any part of an image on the screen for an instant Google search. The Galaxy S24 series also introduces AI translation, message tone customization (casual, formal, business, or social media), AI summaries and translation of voice recordings, “generative editing” for photos, and a feature that transforms real-time videos into slow-motion by employing AI to fill in non-existent frames.

Samsung emphasizes the security and privacy aspects of its on-device AI, which means these generative AI functions are downloaded and processed on the user’s device without the need for continuous cloud connectivity. This aligns with the growing trend among tech companies, including Qualcomm and Samsung, to prioritize on-device AI as a more secure alternative for handling personal information.

Market analysts project a significant growth in AI-capable smartphones, estimating that 45 percent of smartphones shipped in 2027 will have AI capabilities, up from the current 5 percent in 2024, according to forecasts by Canalys.

Jene Park, Senior Analyst at Counterpoint, anticipates a transformative impact on the smartphone market in terms of user experience, although the immediate effect on consumer purchasing decisions might take time as generative AI functions evolve with more extensive and refined data.

The Galaxy S24 series is set to hit the market on January 31. In the United States, the base Galaxy S24 will be priced at $799, while the higher-specification versions, S24 Plus and S24 Ultra, will be available at $999 and $1,299, respectively. Samsung has maintained the prices of the base and Plus models at the same level as last year, with the Ultra seeing a $100 price increase.

In a parallel development, Google introduced an AI-powered multisearch feature in the United States, enabling users to search with both images and text simultaneously using mobile phones. This feature will be available on smartphones like Pixel 8, Pixel 8 Pro, and the new Samsung Galaxy S24 series starting January 31, as announced at the Samsung Electronics Unpacked event.

Google, a major player in the online search market, continues its competition with Microsoft in the realm of generative artificial intelligence. The multisearch feature can be accessed through the lens camera icon in the Google app for both Android and iOS platforms.

Baburajan Kizhakedath