Market Insight

Artificial Intelligence is Next Key Growth Area for Smartphones as Numbers Top Six Billion by 2020

March 31, 2017

Jack Kent Jack Kent Director, Media and Advertising

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We see AI making smart devices even smarter with improved user experiences. Existing AI agents like Apple’s Siri and Google Assistant will expand across the industry, complemented by embedded AI in all parts of mobile devices from cameras, to audio, to machine. Furthermore Smartphones will both be the interface for consumer AI and deliver the vast amount of data technology companies need to train AI systems.

Download complimentary: What’s next for mobile: 6 areas to watch in 2017 Whitepaper to view full analysis

Software investments and partnerships are critical for hardware companies to create smarter AI-enabled experiences. Vendors such as Google, Apple, Sony, Microsoft and Samsung have heavily invested in the development of their own AI and voice-assistant capabilities. In order to compete, smaller players with less in-house software expertise and resources will be looking to partner-up.

As Amazon’s Alexa makes its way onto other devices, Google must and will increase the reach of its own Assistant to all Android smartphones—reducing the differentiation for Google’s Pixel smartphone. Over five years since Apple’s Siri first launched, Apple must offer new AI-powered capabilities to remain competitive.

The AI opportunity comes at a time when the global smartphone installed base is still growing, the white paper said. By 2020, the smartphone-installed base will exceed six billion units, up from four billion in 2016, with revenues totaling $355 billion.

Spending on mobile apps shows no sign of slowing down, Consumer spending on mobile apps will reach $74 billion in 2020, up from $54 billion in 2016. Major companies are increasingly trying to use the fast-maturing mobile apps and services market as part of a wider platform strategy to tie consumers into ecosystems. The combination of consumer apps, communications, advertising, commerce and payments will drive new growth opportunities.

The number of addressable smartphones for device-based payment services, such as Apple Pay and Android Pay, will rise to more than five billion units by 2020, up from 2.7 billion in 2016.

View What’s next for mobile: 6 areas to watch in 2017 Whitepaper to read the full analysis

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