Generative AI to Spark Smartphone Upgrade Cycle, Anticipates Qualcomm CEO

JJohn January 12, 2024 7:02 AM

Qualcomm CEO Cristiano Amon believes generative AI integration in smartphones will initiate a new upgrade cycle in 2024, reviving sluggish sales. With smartphone sales at their lowest in almost a decade, this innovation could be a game changer, offering low latency, personalized experiences, and enhanced security.

Qualcomm CEO's optimistic outlook

Cristiano Amon, CEO of Qualcomm, has a positive outlook for the smartphone market despite struggling sales in recent years. In his statement at CES 2024, Amon highlighted the potential of generative AI technology in smartphones, predicting it to stimulate a fresh upgrade cycle as early as 2024. This resurgence in upgrades could, by implication, bolster the overall phone market significantly.

The smartphone market has been in a downturn for over two years, hit by a variety of factors including a macroeconomic slowdown, component shortages, inventory build-up, and longer replacement cycles. Qualcomm, the top chipmaker for handsets, has felt the impact with a reported 24% drop in revenue. However, Amon believes the introduction of new AI devices could potentially turn the tide and encourage growth again.

Device-based generative AI as a game changer

Until now, the application of generative AI has primarily been cloud-based. However, device and chipmakers are beginning to recognize the potential benefits of shifting this technology to devices. This is viewed as a significant game changer, poised to deliver reduced latency, more personalized user experiences, and increased security. This shift in application could potentially alter the landscape of the smartphone market.

Projected surge in generative AI smartphone shipments

Amon's expectations are supported by early estimates. Preliminary data from Counterpoint Research anticipates generative AI smartphone shipments to exceed 100 million units in 2024. The growth doesn't stop there, with projections predicting the number to surge to a staggering 1 billion by 2027. This anticipated growth reinforces Amon's optimism for the smartphone market's revival.

Despite the potential in the smartphone market, Qualcomm is not putting all of its eggs in one basket. Under Amon's leadership, the company is broadening its scope beyond mobile, making notable strides into the field of auto chips. Qualcomm has already reported a pipeline of more than $30 billion in design wins for its digital chassis platform and expects to hit $9 billion in revenue by the end of the decade.

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