The world’s two biggest smartphone makers, Samsung and Apple (AAPL), are going all in on generative AI. Check out Samsung’s latest Galaxy Unpacked event in Paris, where the company introduced its latest foldable smartphones and touted the benefits of its Galaxy AI platform.
Apple, meanwhile, spent most of its WWDC event in June talking about how its Apple Intelligence generative AI software will power new features on its iPhones. But the companies, which will collectively make up 36.6% of the worldwide smartphone market in Q2 2024, according to IDC, are taking markedly different approaches to bringing generative AI to their users.
Samsung wants to quickly build a large user base for its generative AI services, incentivizing developers to build apps for its Galaxy AI platform. And as those apps prove more capable 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 three generations of its foldable phones. Overall, Samsung expects to put Galaxy 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, and later versions of its ubiquitous smartphone, will get Apple Intelligence features.
Apple hopes to boost iPhone sales in the short to medium term by encouraging users interested in generative AI apps to upgrade to next-generation devices, rather than keeping their current iPhone for years to come.
Despite their differences in approach, both companies still need to prove to consumers that generative AI apps are worth the hype. And that will take time.
“By 2025, or maybe even a little longer, most of the purchases would have already been made, rather than purchases that have already been made now. [people] run out because they need [AI] “We need a number of features,” explains 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, introducing its Galaxy AI platform in January, complete with a handful of AI apps from Google (GOOG, GOOGL), alongside its Galaxy S24 line. Since then, the company says that 77% of S24 users have used its AI capabilities at least once a week. So far, Samsung says that Google’s Circle to Search feature, which lets you take photos of objects and text and circle them to identify or translate them, has been one of 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 those apps, I find Transcription the most useful. Photo editing, which lets you manipulate photos using generative AI, feels more like a treat than a must-have feature that people will use regularly.
Still, those options are a start. And as they get into the hands of users and developers, Samsung will inevitably create more interesting and, more importantly, more useful AI offerings in the future.
“I think Samsung realizes they want to get an edge [Galaxy AI] “We want to get it in front of as many people as possible,” explains Bob O’Donnell, president and principal analyst at TECHnalysis Research.
“They want to get developers excited about building things for their platforms. And so this is a way to do that, because all of a sudden you have a significantly larger install base with Samsung incorporating some of the previous generations, whereas with Apple it’s obviously going to be a significantly smaller install base,” he added.
Samsung’s approach should incentivize developers eager to reach a large user base to build apps for its platform. And if those developers build compelling apps, users will inevitably choose Samsung’s devices to access those apps. The approach won’t move smartphone units 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 the next time they buy a new phone.
Apple, however, isn’t interested in waiting for phone sales to trickle in. The company clearly wants users to buy its next-generation iPhone as soon as it hits the market, likely in September. It makes sense for Apple. The iPhone is its most important product, and after sales slowed in 2023 and a mixed start to 2024, getting new devices into the hands of consumers sooner rather than later is a must.
Wall Street is hoping that the company’s Apple Intelligence platform will help fuel a new sales cycle in the coming year. By pairing the software with the latest and greatest iPhones, Apple has a better chance of doing just that.
But it also means it will have a smaller install base of users for its generative AI products than Samsung. And that could hurt AI developers who build on Apple’s software, at least in the short term.
Do consumers really want generative AI?
All this generative AI talk will be worthless, however, if consumers don’t actually get it. While Samsung’s early usage numbers are impressive, they only account for users who use the AI software once a week. Considering we pick up our phones dozens of times a day, that’s hardly a ringing endorsement.
Anecdotally, my family and friends are still largely confused about what adding generative AI to their smartphones means for them. While Samsung and Apple have made splashy announcements, the average consumer, at least as far as my own circle is concerned, still doesn’t fully grasp the concept.
For now, we’ll have to wait and see how Apple presents its Apple Intelligence at its upcoming iPhone event in September, and how Samsung and Google further develop their own messages and offerings in the coming months.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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