The Future of AI Smartphones: On-Device AI and Key Features

Remember when smartphones were just for calls, texts, and occasional web browsing? Those days are rapidly fading into history. Today, artificial intelligence is transforming our pocket companions into sophisticated personal assistants that understand our needs, anticipate our actions, and enhance our daily lives in ways previously confined to science fiction. But which AI features actually matter to consumers, and how is this technology reshaping the future of smartphones?

The AI Revolution in Your Pocket

Artificial intelligence has quietly become a major factor in smartphone purchasing decisions. According to recent research by YouGov, a substantial 60% of consumers now consider AI features important when choosing their next smartphone, with 21% rating these capabilities as “very important” in their decision-making process.¹ This shift represents a fundamental change in how we value our devices, moving beyond traditional metrics like camera quality or battery life to the intelligence embedded within.

The adoption curve is accelerating rapidly. Canalys projects that AI-capable smartphones will grow from representing just 16% of new shipments in 2024 to a remarkable 54% by 2028, reflecting a compound annual growth rate of 63%.⁴ This explosive growth is helping to revitalize a smartphone market that had been showing signs of saturation, with Deloitte predicting global smartphone shipments to increase to around 7% in 2025, up from 5% in 2024.²

What Users Really Want: AI Features That Matter

Not all AI features are created equal in consumers’ eyes. The YouGov study reveals an interesting hierarchy of preferences that varies significantly across demographic groups: ¹

Voice assistants remain the most valued AI feature overall, particularly among older adults, with 37% of those 55+ ranking this as their top AI capability
Photo and video editing tools powered by AI take the second spot, appealing to those looking to perfect their social media presence without professional editing skills
Advanced internet search capabilities come in third, offering more intuitive ways to find information
Writing tools that can help compose messages, emails, and documents rank fourth
Visual search rounds out the top five, with particular appeal to younger adults (24% of those aged 18-34)

Interestingly, middle-aged consumers (35-54) show a particular preference for dictation and transcription tools, with 9% rating these as their top AI features. This likely reflects the productivity needs of this demographic, who often balance demanding careers with family responsibilities. ¹

The Gender Perspective

Gender differences add another layer to consumer preferences. Men appear to place higher value on AI features overall, with 25% of men versus 18% of women rating AI as very important in their smartphone purchasing decisions.¹ Paradoxically, when it comes to actual usage, women (57%) are slightly more likely than men (52%) to use AI features, suggesting that practical utility may ultimately trump stated preferences.¹

The Generation Gap in AI Adoption

Perhaps the most striking divide in smartphone AI adoption is generational. Research from Amdocs reveals that 45% of Gen Z consumers are highly aware of upcoming AI features like Apple Intelligence, compared to just 14% of Baby Boomers.³ This awareness translates directly to purchase intent, with 59% of Gen Z saying AI integration makes them more likely to purchase a new smartphone, compared to significantly lower percentages among older generations.³

The engagement gap is equally pronounced: 65% of Gen Z and 70% of millennials report being highly likely to explore and use AI-enabled features, while only 40% of baby boomers express similar interest. ³ This divide creates a challenging dynamic for smartphone manufacturers, who must simultaneously cater to tech-savvy younger users demanding cutting-edge AI while ensuring these features remain accessible to older demographics who may find them intimidating.

YouGov’s research corroborates this trend, showing that approximately 70% of younger consumers (18-34) currently use or plan to use at least one AI-powered feature, compared to just 41% of older consumers (55+).¹ This generational divide will likely shape how manufacturers market and design AI features in the coming years.

On-Device AI: The Next Frontier

A significant technological shift is occurring in how AI functions on smartphones. Rather than relying entirely on cloud processing, manufacturers are increasingly moving AI capabilities directly onto devices through specialized hardware. According to Canalys, AI-capable smartphones are defined specifically as those with dedicated AI hardware that can efficiently execute large generative AI models locally. ⁴

Deloitte identifies several key benefits to this on-device approach: ²

Enhanced privacy and security by keeping sensitive data on the device rather than sending it to external servers
Lower latency for real-time operations like translation or image processing
Reduced dependency on internet connectivity for AI features to function
Hybrid capabilities that allow small models to run locally while accessing more powerful cloud-based models when needed

This shift toward on-device AI processing represents more than just a technical upgrade, it’s a fundamental reimagining of the smartphone as a truly intelligent device that can perform sophisticated tasks independently rather than merely serving as a portal to cloud intelligence.

Balancing Benefits and Concerns

Despite growing enthusiasm, consumers maintain a healthy skepticism about AI in their smartphones. The perceived benefits are substantial, with 63% believing AI will save them time and 44% thinking it will make life easier.¹ However, these benefits are counterbalanced by significant concerns:

60% worry AI tools are primarily for data collection rather than user benefit¹
75% express concerns about how their data is used by AI systems³
38% are concerned about battery drain from AI features¹
31% admit they are not very aware of security features in AI-driven smartphones³

Perhaps most tellingly, 78% of consumers still prioritize good mobile signal over AI capabilities,¹ a reminder that core functionality remains paramount even as AI features proliferate. For smartphone manufacturers, this underscores the importance of ensuring AI enhances rather than detracts from the fundamental utility of these devices.

Looking Ahead: The Future of AI Smartphones

As we look toward the horizon, several trends are likely to define the evolution of AI in smartphones:

Multimodal Intelligence

Future AI systems will increasingly work across different modes of interaction, seamlessly handling text, voice, images, and video inputs. This multimodal approach will enable more natural and intuitive user experiences, allowing smartphones to understand and respond to users in whatever form of communication is most convenient. ⁴

Hyper-Personalization

As on-device AI learns from user behaviors and preferences, smartphones will become increasingly personalized, adapting their interfaces, suggestions, and functionality to individual needs. This level of customization goes well beyond current personalization options, potentially transforming how we interact with technology. ⁴

Ecosystem Integration

AI features will increasingly span beyond the smartphone itself, creating seamless experiences across wearables, home devices, vehicles, and other connected technologies. This integration will position the smartphone as the central hub of a broader intelligent ecosystem. ⁴

New Economic Models

The rise of AI in smartphones is likely to spawn new business models, including AI-as-a-feature, AI-as-a-service, and AI-as-an-interface approaches that could reshape how manufacturers monetize their devices beyond the initial purchase. ⁴

For these visions to materialize, manufacturers will need to address significant challenges in areas like user education, privacy protections, and developing compelling use cases that demonstrate clear value to consumers. The success of AI smartphones will ultimately depend on finding the right balance between technological capability and practical utility.

The Personal AI Assistant Era Begins

We stand at the threshold of a new era in mobile technology, where smartphones transcend their role as communication devices to become truly intelligent companions that understand, assist, and enhance our daily lives. With smartphone shipments containing generative AI capabilities projected to exceed 30% by the end of 2025, ² we are witnessing the early stages of a transformation that will likely redefine our relationship with technology.

The path forward is not without challenges. Manufacturers must convincingly address privacy concerns, manage battery consumption issues, and create intuitive interfaces that make AI accessible to all users, regardless of technical proficiency. Perhaps most importantly, they must demonstrate that AI features deliver genuine value rather than merely serving as marketing gimmicks.

As Anthony Goonetilleke from Amdocs notes, “Our findings highlight the expansive nature of GenAI technology, especially among younger generations who are adopting it at a rapid pace, while also emphasizing concerns about how it’s being used.” ³ This tension between enthusiasm and caution will likely define the next phase of smartphone evolution as AI becomes increasingly central to the mobile experience.

What AI features do you find most useful on your smartphone? Are you excited about the future of on-device AI, or concerned about privacy implications? Share your thoughts in the comments below, I’d love to hear about your experiences with this rapidly evolving technology.