Kantar, a global data and analytics company, has released new data from its ComTech Smartphone Operating System (OS) project, revealing Gen Z’s appetite for AI-powered smartphones. This demand appears to be boosting sales of Samsung’s AI-enabled Galaxy S24.
The growing demand for AI capabilities in smartphones currently favors Android operating system developers. Apple’s iOS has not yet committed to AI integration, and it is expected to follow in Android’s footsteps. The data also revealed a significant rise in smartphone sales in Europe, the United States and Australia, mainly driven by Android and iOS devices, with the iPhone taking eight of the top ten positions in the sales rankings.
Remarkably, Generation Z represents 27% of consumers actively seeking AI-enabled smartphones. Their requirements closely match current AI capabilities, such as identifying a desirable product in a TikTok video or summarizing a set of handwritten college lecture notes. Notably, smartphone users interested in AI tend to spend more on their devices, with 70% willing to part with £800 or more, compared to 55% of consumers for whom AI has not. no attraction.
AI appears to positively influence brand loyalty and average selling prices (ASP). According to Kantar data, 24% of Galaxy S24 series buyers in the five European countries and the United States cite AI as the main reason for their purchase. In a surprising revelation, the data shows that 93% of these buyers were previous owners of Samsung devices, compared to 87% of those who didn’t place as much importance on AI. As smartphone sales growth remains slow, manufacturers are prioritizing retaining their consumer base over acquiring new customers, and AI is helping them achieve this.
Additionally, AI leads to higher ASPs, with 70% of consumers interested in AI spending more than £800 on their smartphone, compared to 55% of those who do not find AI a valuable feature.
Jack Hamlin, global director of consumer insights at Kantar’s ComTech department, believes that after a long period of stability in the hardware market, AI is emerging as the next differentiator for smartphone makers. He highlighted that AI adoption presents two growth opportunities: increasing the volume and value of smartphone sales and monetizing unique capabilities through subscriptions. He cited Apple’s services revenue, which saw its first quarter 2024 results increase 11% year-over-year, underscoring the outlook for services revenue.
It is clear that AI is pushing new boundaries in the smartphone market and manufacturers are eager to ride the wave, the study illustrates. Kantar will continue to monitor the impact of AI on consumer behavior and market response to AI innovations through its global longitudinal panels.
Kantar strives to combine meaningful attitudinal and behavioral data with deep expertise and advanced analytics to uncover how people think and act. As a marketing data and analytics company, Kantar says it acts as an “indispensable brand partner for the world’s largest companies.”
