AI is the tool of mobile phone revolution, and the question is whose revolution is more thorough.

Written by | Lan Dong Business Zhao Weiwei

Let some people be the first to embrace AI.

Siri, with free access to ChatGPT, can perceive the screen and has the ability to mobilize third-party APPs; iPhone 16 series users can use the camera to recognize objects and locations and achieve cross-language translation; the Wen Sheng Tu Image Playground function can create AI images based on user preferences; writing tools for proofreading and summarizing text... A series of functions centering on Apple Intelligence will arrive in December.

2024 is regarded as the first year of AI mobile phones by OPPO CEO Chen Mingyong. Apple's iPhone 16 sets the tone for AI mobile phones, while domestic mobile phones each show their strengths on the AI path. After the launch of Huawei's Mate70 series, domestic mobile phone manufacturers have all showcased their flagship mobile phones for 2024, with AI capabilities being one of the important highlights.

Yu Chengdong calls the new Mate series the "smartest Mate in history". AI realizes motion trajectories, protagonist moments, and time travel in imaging; AI smart control keys, AI summary masters, and AI air transmission in operation; and message carrying, call noise reduction, and other functions in calls, among which message carrying can prevent others from peeking besides the phone owner.

Visual intelligence is the most noticeable advancement of AI mobile phones. Just like the AI private cloud function released by iPhone 16 this year, it decides whether to execute tasks on the client side or cloud side based on specific tasks, essentially protecting privacy through AI. All data from AI functions are only used for user requests rather than being stored and shared with Apple.

Huawei and Apple have their respective strengths in AI capabilities, and both essentially involve the deep integration of underlying hardware and self-developed software. For mobile phone manufacturers, whether AI is a tool for revolution or a revolutionary tool now has an answer—it is essentially a revolution in mobile phone operating systems, and this change will not happen overnight.

No AI, no phone. How to integrate AI native capabilities into the operating system is the essence pursued by mobile phone manufacturers. The question is whose revolution is more thorough.

Apple yearns for spring

Apple CEO Tim Cook has visited China three times in a year, but Apple Intelligence, representing Apple's client-side AI capabilities, has been slow to land in China.

Like Musk seeking to land autonomous driving in China, Cook also needs to solve the problem of landing Apple Intelligence in China. According to the latest foreign media reports, Apple's client-side AI capabilities may still need to cooperate with local companies, including Baidu and other small Chinese companies, similar to Apple's cooperation with OpenAI.

At the end of October, Apple began rolling out the official version of iOS 18.1, which incorporates Apple Intelligence, Apple's client-side AI capability. The Chinese version of Apple Intelligence has been clearly stated to be officially launched in April next year. For Apple, the landing of Apple Intelligence in China may be one of the ways to respond to the slowdown in sales in the Chinese market.

Falling out of the top five in the Chinese market in the second quarter, Apple regained second place in the Chinese market in the third quarter, undoubtedly relying on the drive of the iPhone 16 series. Across the entire mobile phone market, Chinese smartphone shipments in the third quarter of this year increased by 3.2% year-on-year, but Apple's shipments fell by 0.3% year-on-year.

Domestic substitutions continued to seize Apple's market share, which is not surprising. During this year's Double 11, Apple's official flagship store on Tmall has already started discount promotions for new products, trying to stabilize its position in the market. It should be noted that this situation of price reductions just a month after the new product launch is rarely seen in Apple's previous sales strategies.

Cook cannot help but be anxious. In Apple's third-quarter financial report this year, the iPhone business performed stably, but Greater China was the only market with declining revenue. This situation began in the second quarter of this year, although the decline in the third quarter was not as severe as that in the second quarter. It is important to note that Greater China is the third-largest market after the Americas and Europe.

Apple Intelligence may be the biggest reason to attract users to buy the new iPhone because it is a phone that Apple calls specifically designed for AI.

The demand for the iPhone 16 series has been unleashed as Apple's AI capabilities are gradually released. Judging from the performance in the U.S. market, the AI functions displayed by Apple's iOS 18.1 today are only a small part of what was showcased at the Worldwide Developers Conference in June last year, and the response has not been significant. More anticipated AI functions will be gradually released in December's iOS 18.2 system and new versions next year.

Apple Intelligence, which will be launched in December, will introduce ChatGPT and Apple's visual intelligence tools. For example, users can use the camera control button to obtain information about objects and locations and enable AI translation. An image generator called Tu Le Yuan will support users in customizing emojis. Of course, these new AI software are only applicable to iPhone 15 Pro or higher versions.

Compared to other major companies like Microsoft and Meta, Apple's progress in AI capabilities is conservative. In the view of industry analysts, Apple's current bet on AI marks the beginning of the iPhone upgrade cycle, which is undoubtedly what Apple needs most amid intensifying competition.

Competing in AI is about competing in systems

The primary reason for Apple's urgency is the efforts of domestic mobile phone manufacturers, who are competing for the window period for Apple AI to land in China.

One of the most notable features of Huawei's recently launched Mate70 series is "Message Carrying". When someone other than the phone owner peeks, the phone can hide the content, seemingly equipping the phone with an "anti-peep film". Behind this is the AI capability of the phone to actively perceive the real world.

In fact, domestic manufacturers share a consistent pursuit in AI mobile phones. Real-world perception capability is also a capability defined for AI mobile phones by OPPO CEO Chen Mingyong, in addition to creative capabilities, self-learning capabilities, and efficient computing power utilization. Only when these four capabilities are met can a mobile phone be defined as an AI mobile phone.

Currently, mobile phone manufacturers' efforts in AI mobile phones are seemingly about selling AI features but are mainly at the operating system level. For example, the OPPO Find X8 series is the first model to be equipped with OPPO's self-developed AI operating system ColorOS 15, while the Xiaomi 15 series uses Xiaomi's operating system Peng Pai OS 2. Huawei, needless to say, released the original Hongmeng system long before the Mate70 series, which is regarded as China's first domestically produced mobile operating system.

The operating system (OS) is the software foundation of AI mobile phones. Without a reconstruction of the base, AI function applications will be a mess. The primary goal of domestic mobile phone manufacturers in reconstructing their systems is to have an overarching AI smart assistant, similar to a smarter Siri, serving as the scheduler between users and mobile phone applications and systems.

This AI smart assistant will reduce the complexity of users' mobile phone operations and bring new interaction methods. Taking Xiaomi as an example, Super Xiao'ai has added two important multimodal interaction capabilities. One is to perceive the outside world through the camera to take photos, identify animals or plants, and provide answers. The other is to perceive screen content, where AI can automatically recognize addresses on the screen and jump to navigation.

The Magic7 series previously released by Honor boasts outstanding cross-application operation capabilities through AI. The most exaggerated example is that Honor CEO Zhao Ming can order 2,000 cups of coffee without any operation throughout the process through the voice assistant YOYO. In addition, application permissions can be turned off with a single sentence. These renderings of special scenarios are all designed to showcase the autonomous capabilities of AI mobile phones.

Currently, AI mobile phones have made significant progress in translation, smart image retouching, and local search. These are actually AI tasks that consume relatively low computing power on the client side. In scenarios that consume higher computing power, text-to-image generation, video editing, and online search all require cloud computing power. Therefore, the combination of client and cloud is the mainstream solution for AI mobile phones in large model deployment.

In terms of pace, AI mobile phones will truly mature next year. From December to the first half of next year, domestic AI mobile phone operating systems will gradually be released and promoted to the market.

The operating system of AI mobile phones is just getting started, which is why domestic manufacturers are currently creating their unique AI features. A more important constraint is the chip manufacturers that build the underlying hardware platform. The basic computing power they provide determines the upper limit of mobile phone manufacturers' AI capabilities.

The iPhone 16 series is equipped with the self-developed A18 chip, while domestic mobile phones are mainly divided into two camps. The Xiaomi 15 series and Honor Magic 7 series both use the Qualcomm Snapdragon 8 Gen 2 mobile chip, while the vivo X200 series and OPPO Find X8 adopt the MediaTek Dimensity 9400. These chips all support multimodal AI processing on the mobile phone side, with enhancing the AI capabilities of mobile phones and automobiles being their important roles.

Every link in the mobile phone industry chain does not want to miss the opportunities brought by AI. When Qualcomm launched the Snapdragon 8 Gen 2, it showcased the latest AI technology, with the main focus being changes in the interaction mechanism. For example, when a user pays with a mobile phone, they can directly tell the bank APP's dialog box without needing to open the APP. For billing, the camera only needs to recognize the amount to complete the payment and calculate the amount payable by each person.

Essentially, current AI mobile phones are exploring ways to break traditional interaction methods, not limiting users' usage habits to individual standalone APPs and no longer requiring users to touch the screen with their fingers to operate but instead using the camera and AI agents for interactive experiences. However, breaking this inertia will still take a long time because it is accompanied by a series of new issues such as privacy concerns.

Will 2025 be even more AI-driven?

AI mobile phones should not just have AI functions. AI should not be the hands and feet of mobile phones but rather the brain.

When talking about AI mobile phones, Lu Weibing, president of Xiaomi Group, believes that none of the currently available mobile phones are truly AI mobile phones. The category of AI mobile phones is established, but it is not the AI feature phones seen today. Instead, it requires a reconstruction at the operating system level. "When you don't feel the presence of AI, I think that's when AI's greatest value is realized," he said.

Beyond mobile phones, are there other hardware paths for AI? In the foreseeable future, there are no revolutionary products emerging.

For example, Humane, invested by Sam Altman, released an AI Pin this year, a personal assistant device shaped like a brooch that attaches to clothing with a magnet. It is equipped with large models like ChatGPT and allows natural interaction through voice, but the evaluation after its launch was not good, with issues such as poor heat dissipation and too few application scenarios that could not be resolved.

Without the support of usage scenarios, no matter how powerful the computing logic of AI hardware is, it cannot break the deadlock.

No AI, no phone. What about other hardware like headphones and glasses without AI? The pursuit of AI hardware will not stop. In October this year, ByteDance also launched a Doubao AI headset, which also realizes voice dialog to mobilize the Doubao APP for communication and other functions. Currently, the official JD.com shows over 200 reviews, which can be described as lukewarm.

"I do believe that every sufficiently large new technology will enable a new computing platform—I have many ideas, but they are all in a very early stage," Sam Altman once said. His core message is that OpenAI has no intention of competing with smartphones, but this cannot stop outside expectations. In an era where users' attention is monopolized by smartphones, people are eager to see the emergence of an AI device that allows for more focused and less distracting experiences.

In 2025, whether it's mobile phones or other hardware, they will only become more AI-driven.

According to The Economist's forecast of business trends in 2025, the AI boom will accelerate the growth of total information technology (IT) expenditure, which is expected to increase by 8% to reach $3.6 trillion by 2025. In the United States, about 30% of enterprises will invest $10 million or more in AI, up from 16% in 2024. This includes Apple pushing Apple Intelligence, its AI capability, to more users.

Industry analysts are generally optimistic about their predictions for AI mobile phones, with two dimensions of evolution: higher-level intelligence in capabilities and more user-friendly interaction mechanisms. However, no matter how advanced the AI technology or how powerful the large models are, they must be grounded in users' actual experiences.