Despite strong investor interest in AI smartphones, consumers are taking a wait-and-see approach, Jefferies analysts said Thursday.
The investment bank believes that consumers are not yet fully excited about AI features on smartphones, likely because they are unsure of what AI could offer, its cost and its usability on these devices.
“Most smartphone OEMs, other than Apple (NASDAQ:), have yet to figure out what AI services consumers want and what technical solutions need to be developed to make on-device AI a reality,” analysts said in a note.
“The Android camp would continue to face the challenge of a lack of an integrated hardware-software ecosystem in developing customized AI services,” she added.
Citing industry checks, Jefferies notes that Chinese smartphone volume fell in the low single digits during both the second and third weeks of the 618 shopping festival. This followed almost 30% growth in the first week, driven by deep discounts, especially on iPhones.
Overall, the 618 three-week period saw mid-single-digit year-over-year growth in volume, with mid-single-digit growth for Android and hardware, and high-single-digit growth for iPhones. However, the outperformance of iPhones compared to Android and hardware has narrowed significantly, analysts said.
