The world’s two largest smartphone makers, Samsung and Apple (AAPL), are betting big on generative AI. Take a look at Samsung’s latest Galaxy Unpacked event in Paris, where the company showed off its latest foldable smartphones and showcased the benefits of its Galaxy AI platform.
Apple, meanwhile, spent most of its WWDC event in June focusing on how its Apple Intelligence generative artificial intelligence software will power new features in its iPhones. But the companies that, according to IDCwhich together accounted for 36.6% of the global smartphone market in Q2 2024, are taking decidedly different approaches to bringing generative AI to their users.
Samsung is looking to quickly build a large user base for its generative AI services, incentivizing developers to create apps for its Galaxy AI platform. And as those apps become more powerful and useful, Samsung will attract more users.
Samsung’s Galaxy AI features are available on this year’s Galaxy S24, last year’s S23, and 2022’s Galaxy S22, not to mention all three generations of its foldable phones. In total, Samsung says it plans to have the Galaxy’s AI on some 200 million devices by the end of the year. Apple, however, says that only people who own its most powerful iPhones, the iPhone 15 Pro and iPhone 15 Pro Max, as well as later iterations of the ubiquitous smartphone, will get Apple Intelligence features.
Apple plans to boost iPhone sales in the short to medium term by encouraging users interested in generative AI applications to upgrade to the next generation of devices, rather than holding on to their current iPhone for years.
Despite their different approaches, both companies still need to prove to consumers that generative AI applications are worth promoting. And that will take time.
“By 2025, or even a little longer, most purchases will be purchases that would have happened anyway, as opposed to [people] get exhausted because they need it [AI] “Features,” says Ryan Reith, program vice president for IDC’s Mobile Device Tracker suite.
Samsung vs Apple
Samsung has jumped ahead of Apple in the AI race, launching its Galaxy AI platform in January, along with a handful of Google’s (GOOG, GOOGL) AI apps, alongside its Galaxy S24 lineup. Since then, the company says 77% of S24 users have used its AI capabilities at least once a week. So far, Samsung says Google’s Circle to Search feature, which lets you take photos of objects and text and circle them to identify or translate them, is among users’ favorite AI options.
In addition to Google’s Circle to Search, Samsung offers AI-powered translation, transcription, text composition, and photo editing apps. Of these, transcription is the most useful in my opinion. Photo editing, which lets you manipulate photos using generative AI, feels more like a gimmick than a must-have feature that people will use regularly.
These options are a start, though. And making them available to users and developers will inevitably help Samsung create more interesting and, most importantly, more useful AI offerings in the future.
“I think Samsung recognizes that they want to get [Galaxy AI] “We want to make this information accessible to as many people as possible,” said Bob O’Donnell, president and chief analyst of TECHnalysis Research.
“They want developers to be motivated to build things for their platforms. So this is one way to do that, because all of a sudden Samsung’s install base is significantly larger by bringing in a few generations earlier, whereas with Apple, obviously the install base is going to be significantly smaller,” he added.
Samsung’s approach should entice developers who want to reach a large user base to start building apps for its platform. And if those developers create compelling apps, users will inevitably opt for Samsung devices to access them. This approach isn’t going to shake up smartphones anytime soon, but if customers enjoy using apps built for Samsung’s AI services, they’ll be much more likely to buy the company’s devices when they buy a new phone in the future.
Apple doesn’t want to wait for phone sales to build over time, though. The company clearly wants people to buy its next-generation iPhone as soon as it hits the market, likely next September. That makes sense for Apple. The iPhone is its most important product, and after declining sales in 2023 and a mixed start to 2024, it’s imperative to get new devices into consumers’ hands as soon as possible.
Wall Street is hoping that Apple’s Intelligence platform will help spark a new sales cycle in the coming year. By bundling the software with the latest and greatest iPhones, Apple has a better chance of doing just that.
But it also means the user base for its generative AI products will be smaller than Samsung’s. And that could hurt AI developers that rely on Apple’s software, at least in the short term.
Do Consumers Really Want Generative AI?
But all this talk of generative AI won’t do any good if consumers don’t actually understand it. While Samsung’s early usage numbers are impressive, they only cover users who access its AI software once a week. Considering that we use our phones dozens of times a day, that’s still not a compelling recommendation.
Anecdotally, my family and friends still don’t know what adding generative AI to their smartphones means to them. While Samsung and Apple have made some spectacular announcements, the average consumer, at least in my own circle, hasn’t quite grasped the concept in its entirety yet.
For now, we’ll have to see how Apple presents its Apple Intelligence at its iPhone event scheduled for September, and how Samsung and Google continue to evolve their own messaging and offerings in the months to come.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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