Only 19% smartphone users willing to pay premium for a Gen AI-enabled phone

According to the Counterpoint Research's latest findings smartphone manufacturers may need to adopt low-cost entry models for the artificial intelligence-enabled phones segment.

By  Storyboard18Dec 24, 2024 8:35 AM
Only 19% smartphone users willing to pay premium for a Gen AI-enabled phone
Generative AI (Gen AI) was familiar to 32% of the respondents in the survey conducted by Counterpoint Research.

In its latest survey, Counterpoint Research has found that 59% of the smartphone users plan to upgrade to Gen AI smartphones within a year. However, the survey also noted that only 19% of smartphone users are willing to pay premium for a Gen AI-enabled phone.

Generative AI (Gen AI) was familiar to 32% of the respondents in the survey conducted by Counterpoint Research across seven countries, namely USA, Canada, UK, France, Germany, Poland, and Japan.

Gen AI awareness was highest in North America (72%) and lowest in Japan (7%). Smartphones have been playing a key role in the propagation of Gen AI, with nearly three-fourths of the respondents accessing the technology through their devices, led by Gen Z users.

As smartphones remain integral to people’s daily lives, 59% of the respondents expressed plans to purchase a Gen AI-enabled smartphone within the next year, with the trend being strongest in the US, followed by Germany and France.

The aim of the survey, conducted in September 2024, was to assess people’s awareness of Gen AI, the impact of the technology, concerns, value addition, and influence on future smartphone purchase decisions. Over 25,000 individuals were contacted, but a detailed survey was conducted with a focused group of 3,535 respondents.

- 32% of the respondents from a sample size of 25,000+ are aware of Generative AI, primarily through chatbots and search engines.

- Among the aware users, 73% have used Gen AI on their smartphones, highlighting the device’s key role in boosting awareness and monetization opportunities.

- 69% of users value Gen AI for its time-saving capabilities.

- 59% are open to switching to a Gen AI smartphone by September 2025, with the US leading the trend.

- Over two-thirds of the respondents are ready to pay extra for Gen AI-enabled smartphones.

Commenting on Gen AI’s growing popularity and use cases, Tarun Pathak, Research Director at Counterpoint said, “Generative AI has quickly gained traction due to its accessibility and versatility across personal, professional, and educational applications. Everyday tasks, such as writing assistance, document editing, and research have been made simpler, proving it is an invaluable tool for users. Writing assistance has emerged as the top use case, thanks to its widespread availability, ease of use, and verifiable outputs.

However, features like ‘Circle to Search’ and ‘Call/Meeting Summaries’ ranked lower, likely due to concerns over accuracy and privacy.”

Diving deep into awareness and monetisation opportunities, Mohit Agarwal, a Research Director at Counterpoint said, “Smartphones are playing a pivotal role in Gen AI’s proliferation coupled with strong marketing as consumers across most regions gain awareness of the technology. With smartphones being an essential part of daily life, the inclusion of Gen AI features has become a key factor influencing smartphone purchases. However, many consumers remain unaware of the benefits of on-device Gen AI.

With only 19% of users in the survey willing to pay a premium for a Gen AI-enabled phone, smartphone manufacturers may need to adopt low-cost entry models and explore alternative revenue streams, such as monetizing applications or offering LLM services to developers.”


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First Published on Dec 24, 2024 8:35 AM

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