Smartphone sales will mount a comeback starting in 2024, defying growing warnings of a prolonged slump across the mobile sector, according to separate projections by Goldman Sachs and Morgan Stanley reviewed by TechCrunch.
Morgan Stanley’s report predicts global smartphone shipments will rebound by nearly 4% in 2024 and by 4.4% in 2025, shrugging off comparisons to the PC industry’s multi-year downdrafts.
Driving the smartphone turnaround will be new on-device AI capabilities unlocking fresh demand, Morgan Stanley says. The investment bank raised its projections for 2025 worldwide phone volumes, citing the sizable potential of so-called edge AI to enable advances from enhanced photography to speech recognition while protecting user privacy.
Smartphone makers including Apple, Vivo, Xiaomi and Samsung have already started to express their bullishness on AI. Vivo’s new X100 with on-device AI saw explosive sales, while Xiaomi touted 6x usual volume for its AI-packed flagship. Samsung plans built-in generative AI for 2024 models, aiming to offer ChatGPT-style features processed directly on phones, not the cloud.
“The largest pushback is that there is no visibility on when the ‘killer app’ will be developed. If we take desktop internet and mobile internet as examples, the emergence of a new killer app usually comes 1-2 years after the initial breakthrough,” Morgan Stanley wrote in a report this week.
“While there is no guarantee that the killer app in Edge AI will follow the same timetable, the emergence of Microsoft’s CoPilot as the potential PC AI killer app could set the early foundation for popularizing AI at the edge (implying AI features/function on the device, not relying on cloud), and help to give investors confidence that a similar, but different, killer app for the smartphone will also emerge.”