AI development momentum and potential of the five major Chinese mobile phone manufacturers: Canalys report

According to a recent report released by Canalys, a well-known technology market analysis organization, under the current market structure, AI is becoming a strategic priority for manufacturers.

In order to stand out in the fierce market competition, Chinese smartphone manufacturers are treating AI as an important strategy. With Huawei's re-emergence in the market, defending market share and investing in the development of new and eye-catching features have gradually become the focus of other manufacturers, and AI is expected to become a key factor in this strategic change.

Some local manufacturers with strong horizontal integration capabilities are strategically applying AI to a wider range of hardware categories. This enables the deployment of AI not only to be limited to a single category of mobile phones, but also to a wider range of hardware such as PCs, wearables, TVs, and even cars.

In this way, manufacturers can build a more complete and interconnected ecosystem, and AI can play a key role in it, enhancing the functional experience of a single device and the connectivity between multiple devices.

In addition, as Chinese manufacturers transition to high-end strategies, the market still needs new driving forces in addition to technologies such as foldable screens and 5G. AI, especially the ability to run through generative large models on the hardware side, will boost the growth of the high-end market.

Canalys predicts that the demand for end-side AI capabilities is expected to stimulate a new round of replacements and help increase the average selling price (ASP) of equipment. Manufacturers' strategic focus on AI deployment is also closely linked to the path to high-end, and AI capabilities will also become an effective starting point for manufacturers to promote high-end.

Recently, China’s local smartphone manufacturers have been actively investing in self-developed large language models (LLM). The following are several LLMs recently launched by Chinese manufacturers that will be installed on smartphones.

With the iteration of SoC and the recent rapid upgrade of storage configurations (especially DRAM) on the market, although most Chinese manufacturers still adopt a device-cloud hybrid AI deployment model, But it has also begun to focus more on the capabilities of end-side AI.

The ecological advantages of local manufacturers in the local market enable AI to play a greater role

Compared with its overseas markets, Chinese local manufacturers often have higher add-on rates in the local market and provide It provides a more comprehensive hardware product coverage, and these factors can make AI benefit a wider range of users and application scenarios. For example, Xiaomi's Mijia ecosystem and Huawei's Hongmeng Smart Connect have established a considerable user base in the country.

In addition to providing wearable devices and tablets locally that are also sold overseas, these manufacturers also actively cooperate with local ecological partners to provide products such as home appliances and even More extensive ecological hardware such as cars. With the wide coverage of hardware categories and a more solid user base, AI is expected to play a greater role, leading to more diverse usage scenarios and a more seamless multi-device experience.

High-performance equipment with affordable prices promotes the development of end-side AI

Canalys predicts that Chinese manufacturers will take the lead in bringing AI-capable smartphones into lower price ranges, thus accelerating AI Cell phone penetration. Taking into account the fierce market competition, supply chain cost advantages and local consumers' recognition of cost-effective equipment, local manufacturers have begun to provide flagship-level performance products at extremely competitive prices.

These devices with end-side generative AI running performance and equipped with generative AI features will provide a relatively differentiated use experience. Local manufacturers are expected to have a greater advantage in the mid-range market. Since overseas manufacturers will be difficult to provide equipment with the same hardware performance in the corresponding price range, their end-side AI experience in the mid-range market will be far behind that of local manufacturers.

Local manufacturers (such as Huawei) with strong brand appeal can gain a competitive advantage by establishing close cooperative relationships with local developers. Recently, Chinese software giants (such as Meituan, Alibaba, etc.) have begun to actively cooperate with Huawei to develop native applications for Huawei's HarmonyOS NEXT operating system that are independent of the Android application ecosystem.

Localized operations are the key to spawning an AI application ecosystem

By analogy, when third-party developers need to integrate large AI models in their applications, the same cooperation model may also occur. This cooperation model can provide exclusive, high-quality and differentiated experiences in the future wave of AI application development, thereby creating competitive advantages for manufacturers.

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