Capturing a share of the smartphone AI bounty

With the pending arrival of on-device AI, telcos have their work cut out for them.

Robert Clark, Contributing Editor, Special to Light Reading

June 3, 2024

2 Min Read
Smartphones in a pile.
(Source: Tim Armitage/Alamy Stock)

The handset sector is abuzz right now over AI, sparked by recent announcements from Apple.

Its coming AI upgrades will allow users to control all apps through Siri and do photo retouching and so on. But the biggest part is not what the AI can do but that it will be processed on the device rather than the cloud.

This is being driven by the escalating server and network costs of cloud-only, as well as the privacy issues that go with remote hosting of vast amounts of user data.

On-device AI is going to impact smartphone functionality in far-reaching ways, with some experts calling it a once-in-a-decade upgrade event.

Handset vendors, faced with a saturated market and an absence of compelling new services or capabilities, hope it can fire up new sales and transform their business models.

Research firm Canalys points out most top-end phones launched in 2024 will have sufficient hardware performance to support on-device GenAI. In a new report, it says the AI phone will allow consumers to enjoy "a more streamlined and intuitive experience to interact with the hundreds of apps and services on the phone."

Privacy concerns

It envisages personalized services that leverage contextual information, as well as streamlined services that combine various tasks and apps into one.

Canalys also predicts the emergence of new AI interfaces, like personal agents, that will serve as a trusted gateway connecting multiple apps or third-party AI agents.

A Canalys survey reveals the biggest consumer concerns relate to privacy and security, with more than half of respondents worried about whether the AI devices would have access to their personal data.

All of this leaves telcos with a bit more AI strategizing to do.

On the plus side, they can expect AI to ignite handset sales and in turn help drive subscription upgrades.

They can also confidently believe that, despite the intentions of displacing network traffic, the AI revolution is going to occupy a good deal of their bandwidth.

Quite possibly it will trigger a wave of 5G-Advanced adoption to meet the demands for much improved latency or to help deliver smart enterprise services.

It seems a good bet that the context-awareness and customization capabilities will be excellent tools for improving telco customer experience. But beyond that, it's a race to find new ways of taking advantage of smartphone AI to grow their topline revenue.

As the Canalys report puts it, Qualcomm and Mediatek are laying a foundation for on-device AI right now, while handset leaders Apple, Google and Huawei are all building out full-stack AI moats.

Telecom operators have their work cut out if they want to capture a share of the smartphone AI bounty.

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About the Author(s)

Robert Clark

Contributing Editor, Special to Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. In addition to contributing to Light Reading, he also has his own blog,  Electric Speech (http://www.electricspeech.com). 

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