Global spending on AI-equipped smartphones is set to reach $298.2 billion by the close of 2025, according to the latest forecast from Gartner. This surge reflects a growing demand for mobile devices that feature built-in neural engines, or NPUs, making advanced AI a baseline expectation for both premium and affordable models.
The mobile industry is experiencing structural change as AI features move from a luxury to a mainstream necessity. Vendors have responded by integrating small language models directly on devices, enabling new user experiences that previously required remote cloud processing.
How Is AI Smartphone Spending Projected to Surge in 2025?
According to research, generative AI smartphones should account for 20% of all AI end-user spending in 2025. Rapid on-device AI integration and a spike in consumer, enterprise, and industry interest are driving the market's momentum.
According to IDC, over 370 million GenAI smartphones will ship globally in 2025, accounting for a 30 percent market share.
By 2026, spending on GenAI smartphones is forecast to rise another 32 percent, reaching $393.3 billion as mobile vendors race to add advanced AI features and improve user experiences. The smartphone segment’s growth outpaces other consumer hardware categories.
Did you know?
The first smartphone with an embedded neural processing unit was launched in 2017, transforming on-device AI capabilities for the industry.
What Is Driving the Adoption of GenAI Devices?
Hardware advances are a key catalyst for AI smartphone adoption. According to Gartner, 41 percent of basic models and nearly all premium GenAI smartphones will have NPUs by 2025.
These chips dramatically increase on-device intelligence, powering small language models, advanced voice assistant functionality, and real-time image analysis.
As smaller brands adopt mid-tier silicon and NPUs, AI smartphones become accessible across various price segments.
The shift marks a democratization of technology, with entry-level and mid-range devices joining top-tier phones in offering embedded AI features.
How Are Chipmakers Shaping the AI Phone Market?
Major chipmakers drive technological progress by enhancing NPU capabilities. Apple’s A18 Pro chip offers a 16-core Neural Engine able to process 35 trillion operations per second, while Qualcomm’s Snapdragon 8 Elite for Galaxy presents a 40 percent stronger NPU than previous generations.
Samsung’s Galaxy S25 series delivers 68 percent faster AI processing thanks to custom NPU architecture.
By 2027, premium GenAI smartphones are anticipated to standardize on-device NPUs that exceed 40 TOPS, raising the bar for what high-performance AI on mobile can achieve.
Industry leaders continue to battle for dominance in the race to AI-enabled mobile hardware.
Why Do Consumers Adapt Slowly Despite Lower Prices?
Consumer adoption shows mixed enthusiasm, with only 19 percent of buyers willing to pay extra for GenAI models as of mid-2025. However, 59 percent are open to switching to GenAI phones by September, suggesting latent interest.
Lower costs have helped accelerate adoption, as the average AI-enabled device price dropped 39 percent in the past year to $994.
Cheaper chips and rising sales of base models have made AI smartphones more attainable.
Mid-tier Android phones increasingly offer GenAI features as standard, reflecting widening access and changing consumer expectations.
What Does the Future Hold for AI Smartphones?
By 2029, all premium smartphones are expected to integrate GenAI capabilities. As conversational AI evolves into natural dialogue, users may begin to see mobile devices as proactive digital companions, not just reactive tools.
Continued advances in on-device NPU performance will require regular hardware upgrades. Manufacturers will focus on developing increasingly sophisticated AI features, fueling persistent demand for new smartphones and setting the stage for the next era of mobile innovation.
GenAI smartphones stand on the verge of reshaping the mobile landscape. As AI capabilities become more intuitive and widely accessible, users can expect a future where every device is smarter, faster, and more adaptable to individual needs.
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