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AI smartphone sales expected to be slow in India in 2024

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In Short:

AI-capable smartphones are expected to make up only 4-5% of total smartphone shipments in India this year. Market experts believe smartphones are the ideal platform for genAI access, but high prices are hindering widespread acceptance. Research firms predict 2025 as the turning point for AI phones in India, with growth expected in lower price tiers eventually. Consumers in India are showing interest in AI-based applications and devices.

Generative AI-capable Smartphones Expected to Constitute 4-5% of Total Shipments in India

New Delhi: Generative AI-capable smartphones are expected to comprise only 4-5% of the estimated 152-156 million total smartphone shipments in India this calendar year, indicating a slow start for the segment where brands are starting to invest in creating awareness and finding relevant use cases for consumers.

Globally, AI smartphones are expected to comprise 17% of total shipments of 1.2 billion handsets in 2024, according to market research firms.

Challenges in Widespread Acceptance

Smartphones are considered the perfect platform for making genAI accessible to the masses as evolving hardware and software capabilities are ideal for running compute-intensive AI models, say market experts. However, AI-capable smartphones or those using large-scale, pre-trained genAI models for creating original content or performing context-aware tasks are currently much costlier than other smartphones with a starting price of $600, hindering their widespread acceptance.

Analysts believe prevailing high prices will deter AI smartphones from becoming widely popular in India, unlike in other markets like China, South Korea, and Japan.

Future Growth Projections

Counterpoint Research said 2025 will be the inflection point for AI phones as it permeates to broader price segments, especially in the $400-600 price band.

The research firm noted that 4-5% of the total 152 million units shipped in India would be AI-capable in 2024, primarily in the premium segments including the latest iPhones and new flagship phones from Korean major Samsung.

“We expect AI-capable devices to grow 4-5 times by 2027 in India, driven by chipset support at the lower price tiers eventually,” said Tarun Pathak, research director, Counterpoint Research.

Market Insights and Consumer Sentiment

Research firm Canalys said it would be unrealistic to expect AI phones to retail in the mid-range and budget segments, before brands are able to figure out the right paths to monetise genAI applications and bring down costs of providing these features.

It said 1.2 million AI-capable devices were shipped in India in the March quarter, which is expected to touch 4-5 million units by December-end, or about 3.2% of the total 156 million shipments forecast for 2024.

“38% of Indian consumers have shown very-high to high inclination towards using AI-based applications and devices, while 36% of consumers have shown some interest,” said Sanyam Chaurasia, analyst at Canalys, quoting data from a recent consumer survey by the firm.

Chaurasia said 2024 will see firms create brand awareness and how AI features are showcased to consumers, with large-scale adoption only expected to happen in two to three years.

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