Samsung Intensifies AI Push to Challenge Apple’s Smartphone Dominance

Samsung is strategically pursuing partnerships with artificial intelligence (AI) companies to integrate a diverse range of AI models into its smartphones, aiming to surpass Apple in the competitive global market. This move underscores the growing importance of AI as a key differentiator in the smartphone industry, as hardware advancements offer diminishing returns.

Strategic AI Partnerships

TM Roh, Samsung’s consumer device chief, emphasized the company’s openness to “strategic co-operation” with AI groups, including OpenAI. Samsung has already integrated Perplexity AI’s search engine into its mobile operating system, allowing users to access its voice assistant with the command “Hey Plex.” Roh highlighted that Samsung’s research indicates consumers are increasingly utilizing multiple AI services rather than relying on a single platform, and providing greater choice could be a key advantage for Galaxy devices. Financial Times

“We got into the preparation earlier than others, [and] that is how we have taken and maintained leadership in mobile AI,” stated Roh, who also serves as co-chief executive of Samsung Electronics.

AI as the Novel Battleground

The increasing focus on AI reflects a broader industry trend. With global handset sales projected to decline by 12% in 2026 – the lowest annual volume since 2013 – manufacturers are betting on AI-powered features to influence consumer purchasing decisions. Financial Times Samsung recently announced its S24 family of devices, featuring a suite of new AI tools, including integration with Google’s Gemini models and a voice assistant capable of booking taxis without manual input.

Roh noted, “Consumers are not bound to one AI platform, they are utilising multiple AI models. We are open to all solutions… choice, I believe, is how Galaxy AI appeals to consumers.”

Apple’s Response and Market Dynamics

Apple, which lagged in initial AI feature releases, has responded by striking a deal to use Google’s Gemini models and leveraging OpenAI’s ChatGPT for smarter search and writing functions. An overhauled Siri voice assistant is expected to be released this year. Financial Times

Apple briefly surpassed Samsung as the world’s largest smartphone maker by volume in 2023, ending Samsung’s 12-year reign, but Samsung regained the lead at the start of 2024 as iPhone sales declined. Financial Times

Supply Chain Challenges and Pricing

Samsung has increased US prices for some S24 models by $100, partially due to a supply crunch in memory chips. Memory suppliers, including SK Hynix, Micron, and Samsung itself, are prioritizing the production of high-bandwidth memory for AI data centers over chips used in smartphones. This shift is contributing to a broader market trend where consumers are receiving smartphones with fewer specification improvements at stable or increasing prices. Financial Times

The International Data Corporation has warned of a “tsunami-like shock” impacting the market, reversing a decade-long trend of improving smartphone specifications at lower prices.