Spend more than ₹1 lakh on a flagship smartphone has been normalized, but Samsung could soon set a new standard in India. It is now the first brand in India to surpass ₹Priced at 2 lakh with top end Galaxy Z Fold6 (12GB, 1TB variant). Samsung justifies the new price by offering new hardware specifications, slight design changes and of course, there’s Galaxy AI.
For buyers, an important question arises: what is the maximum price to pay for a new flagship smartphone in India? The same question can now be rephrased for Samsung: how long can the prices of premium smartphones continue to rise?
With the sudden push towards “AI in smartphones,” thanks to the hype around ChatGPT, Samsung has hinted at the possibilities somewhat. The launch of Galaxy AI with the Samsung Galaxy 24 series, earlier this year, wowed smartphone enthusiasts with unique AI generative camera features. However, people soon realized that there was a small asterisk that informs Samsung Galaxy S24 Series Users are informed that Galaxy’s AI features are “free until the end of 2025” and that “different terms may apply for AI features provided by third parties.”
This footnote makes us wonder whether artificial intelligence in smartphones could become the next big revenue stream if brands deliberately seek to keep premium smartphones relatively affordable in the future. This strategy is similar to that of Xiaomi and other Chinese brands, which sold subsidized smartphones through advertising revenue a decade ago.
At Samsung Galaxy Unpacked 2024 event in Paris, HT Technology had the chance to ask TM Roh, President and Head of Mobile eXperience Business at Samsung Electronics. Here are excerpts from the interview:
Q: What comes to mind when we talk about an “AI smartphone”?
ROH Trademark/Intellectual Property: The unique thing about mobile devices is that they are always with them, anytime and anywhere. They get information, share it, communicate it and use it whenever they want. This is a very important and unique role of mobile devices.
When this unique feature of mobile devices meets the capabilities of AI, new features of mobile AI emerge, so that it becomes an absolutely necessary feature in the basic platform of mobile devices and internally we say that it is no longer a smartphone, but an AI phone. Thus, AI features are now inseparable from mobile devices, so much so that it has become a basic technology and platform for mobile devices.
Mobile AI is still in its early stages and as it progresses and becomes more sophisticated, it will bring new requirements for hardware specifications and there will be some expansion of mobile AI-based services and applications.
I strongly believe that mobile AI will be a new driving force for mobile devices.
Q: How does Samsung plan to generate additional revenue from AI services on Galaxy smartphones?
ROH Trademark/Intellectual Property: When it comes to monetizing AI services, mobile AI technologies are evolving and progressing at a rapid pace, as are the usage scenarios and modes. New services and applications leveraging AI technologies are emerging, so it would be premature to discuss how AI services will be monetized.
I believe monetization decisions should and will be made based on a comprehensive examination of customer voice and needs, market demands, market needs, and technology trends and changes.
Q: Will Samsung reserve the Galaxy’s AI services for high-end smartphones only? If not, how do you plan to integrate AI into affordable smartphones with lesser hardware capabilities?
ROH Trademark/Intellectual Property: Galaxy AI is basically a AI hybrid model which leverages on-device AI and cloud-based AI and combines them based on specific use cases and leverages relevant platforms. As you mentioned, for on-device AI to work properly, of course, there needs to be hardware that is adequately designed to run the AI workloads. So the hardware requirements will be taken into account and the relevant on-device engine and models will be decided. Only then can the optimal level of performance and execution of AI workloads be achieved.
At Samsung Mobile, with Galaxy devices, even before the advent of generative AI, which has become very popular, we have always leveraged AI to advance the performance of native apps, including camera and gaming performance. To do this, we have also advanced and improved the performance of the NPU. With these strengths, we have been able to spread and expand Galaxy AI at a faster pace, expanding its availability on Galaxy devices launched after 2022, including the Galaxy S22 and other foldables. This is Samsung’s strength that has democratized Galaxy AI very quickly.
To answer your question, will the Galaxy AI expansion reach the A series smartphones? Due to hardware limitations, it will be quite difficult to enable a full Galaxy AI experience on the A series. However, some of the Galaxy AI features and capabilities that can be supported by the A series hardware are currently being implemented and we will continue to do so.
This will be done on a case-by-case basis and in a native application-by-application approach. We have done this and we will continue to do so in the future. We are also reviewing and considering extending Galaxy’s cloud-based AI capabilities to the A-series on a case-by-case basis.
Samsung Mobile CEO TM Roh stressed that the company plans to make Galaxy AI accessible to as many consumers as possible. “We will make continuous efforts to achieve this. To do this, we are constantly engaging in research and development efforts to make the embedded models more optimized, lighter, and we are advancing the engine and models further and further so that we can apply Galaxy AI to as many models as possible,” Roh added.
While the first step seems to be to hook as many users as possible to Galaxy AI on Samsung smartphones, the company has until the end of 2025 to figure out monetization.