New Delhi, Oct 19 : The shipment of generative AI (GenAI) smartphones is forecast to surpass 730 million units by 2028, according to a new report.

The shipment share of GenAI smartphones is forecast to reach 19 per cent this year and by 2028, this is expected to reach 54 per cent, according to Counterpoint Research. This growth would be more than 3 times the projected levels in 2024.

This year, Samsung and Apple are set to capture over 75 per cent of the global GenAI smartphone market, mainly driven by their strong presence in developed markets and dominance within the premium segment.

'Both brands are leveraging their premium positioning to capture early adopters, particularly in developed regions where high disposable income and interest in new technologies drive demand for top-tier smartphones,' said the report.

Over the short-term, GenAI will rule the premium smartphone category while through the medium-term we expect it to expand in segments past mid-end devices.

The semiconductor sector will see substantial growth, reaching $339 billion by 2030, driven mostly by the adoption of on-device GenAI. The technology will increase semiconductor costs to 45 per cent of its bill of material (BoM) by 2030.

Major contributors to the cost of semiconductors in smartphones include processors, memory, connectivity, power, sensors, and audio, with GenAI weighing the most on processors, followed by memory, sensors, and audio.

'The emergence of GenAI is reshaping the smartphone industry drastically, shifting focus from hardware such as bigger screens, faster processors, and more cameras to delivering a more intelligent, adaptive and personalised user experience,' the report mentioned.

According to the report, competition among smartphone original equipment manufacturers (OEMs) will tighten further, shifting from a tussle based on specs to one based on delivering true personalisation.

'The key for OEM differentiation will lie in the implementation of AI, and we are already starting to see this evolution of AI use cases. Current applications include enhanced imaging capabilities, translation features, improved app experiences, content recommendations, and personalised content creation,' the report noted.

/IANS