Despite strong investor interest in AI-enabled smartphones, consumers are adopting a “wait and see” approach, Jefferies analysts said Thursday.
The investment bank believes that consumers are not yet completely excited about AI features on smartphones, likely because they are unsure of what AI can offer, its cost, and ease of use on these devices.
“Most smartphone OEMs, other than Apple (NASDAQ:), have not yet figured out what consumers of AI services want and what technical solutions need to be developed to make on-device AI a reality,” the analysts said in a note.
“The Android team will continue to address the challenge of the lack of an integrated hardware and software ecosystem in developing custom AI services,” they added.
Citing industry scans, Jefferies points out that smartphone volume in China fell by low single digits during the second and third weeks of the 618 Shopping Festival. This followed nearly 30% growth in the first week, driven by deep discounts, especially on iPhones.
Overall, the three-week period saw 618 mid-single-digit year-over-year growth in volume, with mid-single-digit growth in Android devices, and high-single-digit growth in iPhones. However, analysts said the iPhone's superior performance over Android devices has been significantly reduced.
