Generative AI features are rapidly becoming a standard expectation in smartphones, not just premium extras.
According to Counterpoint Research, devices with GenAI capabilities will account for nearly half of all global shipments next year, even as the overall market faces its steepest drop in years.
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The firm's latest forecast shows GenAI-equipped smartphones rising from 36% of shipments in 2025 to 45% in 2026, and then to 52% in 2027.
This adoption is happening faster than many anticipated.
Apple is set to introduce several GenAI features with the iPhone 18 series this September.
Meanwhile, Android OEMs are moving beyond basic AI tools, focusing on advanced “Agentic AI” experiences for their flagship devices.
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Market Contradiction: AI Boom Amidst Decline
This AI surge coincides with a struggling broader smartphone market.
Global shipments are expected to fall 13.9% in 2026 to just 1.08 billion units, reportedly the lowest since 2013.
The primary cause is a serious memory chip shortage. Manufacturers are prioritizing high-profit AI server memory (DRAM and HBM), driving up prices for phone memory (LPDDR).
Budget and entry-level models are hit hardest, with some possibly disappearing from shelves.
Higher-end GenAI phones can better absorb increased costs, accelerating premiumization as consumers either buy flagship devices or opt for refurbished ones.
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This environment benefits major players like Samsung and Apple, who dominate the high-end market.
Samsung holds a particular advantage as it also produces a large share of the advanced memory chips powering AI servers and data centers.
Conversely, brands reliant on affordable phone sales, especially in emerging markets, face pressure.
On the positive side, smarter GenAI features—such as on-device image generation, intelligent assistants, and advanced photo editing—are giving consumers real reasons to spend more.
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Once the memory supply eases, likely in late 2027, the industry could emerge stronger with more capable devices overall.
