In defiance of widespread concerns about an extended downturn in the mobile sector, Goldman Sachs and Morgan Stanley,anticipate a resurgence in smartphone sales beginning in 2024.
Morgan Stanley’s analysis forecasts a nearly 4% global rebound in smartphone shipments for 2024, followed by a 4.4% increase in 2025. This optimistic outlook dismisses comparisons to the prolonged downturns experienced by the PC industry.
The catalyst for this turnaround, according to Morgan Stanley, lies in the integration of new on-device AI capabilities, stimulating fresh demand. The report highlights the potential of edge AI to bring about advancements in areas such as enhanced photography and speech recognition while safeguarding user privacy. Leading smartphone manufacturers like Apple, Vivo, Xiaomi, and Samsung are already expressing confidence in AI, with successful sales of AI-packed flagship models.
Samsung, for instance, plans to incorporate generative AI directly into its 2024 models, aiming to provide features similar to ChatGPT directly on phones, without relying on the cloud.
Despite skepticism about the timing of a potential “killer app,” Morgan Stanley draws parallels with historical examples like desktop and mobile internet, suggesting that the emergence of Microsoft’s CoPilot as a potential PC AI breakthrough could pave the way for the popularization of edge AI in smartphones.
Goldman Sachs, while acknowledging a 5% year-on-year dip in global smartphone volumes for 2023, projects a revival in momentum in 2024 and 2025, driven by new product launches. The forecast anticipates a 3% rise to 1.186 billion smartphone shipments in 2024, followed by a 5% increase to 1.209 billion in 2025.
Contrary to the prevailing belief that maturing smartphones face challenges similar to those encountered by personal computers, Morgan Stanley argues that replacement cycles and expanding use cases continue to favor mobile phones. The report contends that smartphones, unlike PCs, are not facing substitution risks from technologies like AR/VR, with shorter replacement cycles and a continuous expansion of use cases, especially with the anticipated wave of innovation fueled by Edge AI.
