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Joaquim Cardoso MSc.
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January 18, 2024
This is an Executive Summary of the article “Samsung turns to artificial intelligence to revive stagnant smartphone market”, written by Song Jung-a, and published on the Financial Times.
What is the message?
Samsung’s introduction of the Galaxy S24 series, featuring “on-device” generative artificial intelligence (AI) capabilities, signifies a strategic move to revitalize the stagnant smartphone market and gain a technological edge over competitors, particularly Apple.
Key Points and Arguments:
AI Integration for Market Revival:
In response to the smartphone market’s worst year in a decade in 2023, Samsung is leveraging generative AI to differentiate its offerings and regain market leadership. The S24 series showcases AI-enabled features running directly on the device, providing a unique selling point.
Technological Edge Over Apple:
Samsung’s adoption of on-device AI places it ahead of Apple, which has been more cautious in embracing such technological advances. This move gives Samsung a nine-month lead before the next iPhone release, presenting an opportunity to distinguish itself in the market.
Competitive Landscape:
While Google has a head start in AI development, Samsung’s focus on on-device AI allows it to compete effectively. The integration of AI chatbots and applications within the phone’s hardware promises faster response times, enhanced security, personalization, and cost efficiency for AI providers.
Product Innovation and Market Leadership:
Samsung’s shift towards generative AI aligns with its long-term product strategy, especially in premium and flagship segments. To compete with Apple and maintain leadership in the Android ecosystem, Samsung aims to drive innovation not only in hardware but also in business models and product offerings.
Market Outlook:
Canalys predicts that 5% of smartphones shipped in 2024 will be AI-capable, reaching 45% of the total smartphone market by 2027. Counterpoint Research anticipates Samsung’s significant control over the AI-powered phone market in the coming years.
Examples and Statistics:
- Samsung’s 12-year reign as the world’s top smartphone maker ended in 2023, with Apple taking the lead, driven by consumer preferences for higher-priced premium handsets.
- The S24 series introduces AI features such as live phone call translations, voice recording transcriptions, video search, and photo editing.
- Canalys expects 5% of smartphones shipped in 2024 to be AI-capable, with Counterpoint Research projecting Samsung’s dominance in the AI-powered phone market.
Conclusions and Recommendations:
Samsung’s strategic focus on on-device generative AI represents a pivotal move to reinvigorate the smartphone market. To sustain this momentum and compete effectively, Samsung should continue investing in AI research and development, explore cross-device integrations, and leverage marketing strategies highlighting the unique AI capabilities of the S24 series. As the smartphone market rebounds, the success of Samsung’s AI-driven approach will be crucial for its long-term market leadership and brand positioning.
