AI big smartphone pitch, but basics remain prime

The finding comes as smartphone makers are packing AI into devices across price segments, from flagship phones that can translate conversations and search files using natural language to more affordable models offering AI photo editing, transcription and generative tools.

An Amazon India survey of more than 40,000 respondents conducted in July found that AI features influence the purchase decision of 82% of smartphone buyers. Contextual assistance was the most wanted AI capability, cited by 25% of respondents, followed by generative photo editing at 18% and visual search at 17%.

Yet Amazon’s data also reinforces Counterpoint’s finding that the fundamentals remain important. Performance and speed were the biggest purchase drivers at 87%, followed by battery life at 79% and camera quality at 77%. Battery, in particular, remains a weakness. It was the aspect consumers most frequently said their current smartphone needs to improve, at 22%, ahead of camera at 17% and performance at 12%.

“While AI has moved from a talking point to an expectation, customers are just as clear about the fundamentals that still matter, like performance, battery and camera. They are also willing to pay more for the device that gets it right,” said Zeba Khan, director, consumer electronics, Amazon India.

“Consumers still value the fundamentals of a fast, responsive and reliable device. With increasing tech literacy and rapid innovation, consumers are now looking for the right combination of features that best fits their usage needs,” said Arushi Chawla, consumer research lead and senior analyst at Counterpoint.

The latest launches all add AI to the traditional smartphone formula of processor, camera, battery and display. Apple’s iPhone 17 Pro and 17 Pro Max launched last year elevated Apple Intelligence, launched in 2024, with Image Background, Notify Me and Call Context features, adding to live translation, writing and summarisation tools and visual intelligence. This year’s models, to be announced on September 9, are rumoured to have A20 Pro chip to optimise on-device Apple Intelligence, along with possibly the brand’s first foldable smartphone.

Samsung’s latest Galaxy Z Fold8 and higher-tier Galaxy Z Fold8 Ultra integrates Galaxy AI across devices. Google’s Pixel 11 Pro, launched on August 12, offers deeper Gemini integration.

The AI push is also moving into phones outside the flagship segment. OnePlus’ N6 offers AI editing tools such as AI Eraser and AI Reflection Eraser. OPPO’s Reno16 5G brings AI into the hardware and a personal memory system integrating assistants including Gemini, Perplexity and ChatGPT. Vivo’s S2 5G has AI Creation and Transcript Assist. Xiaomi’s Redmi Note 15 series brings Google Gemini, Circle to Search and Xiaomi HyperAI.

Nothing’s Phone (4b) uses Essential Space to parse screenshots and voice notes and turn them into tasks and reminders, alongside AI Eraser, voice transcription and ChatGPT-integrated widgets.

Rather than being viewed as another standalone specification, AI is increasingly embedded across tools. “As a result, AI is evolving into a feature-level consideration that can influence consumer preference and, in some cases, trigger a purchase decision,” Chawla added.

“I think smartphone differentiation is moving away from individual specifications and towards the overall user experience. Value for money will always matter, but it is becoming harder for brands built primarily around that proposition to stand out, particularly in a market where consumers are being asked to spend more,” said Akis Evagelidis, co-founder and India president of Nothing. “When you are making a bigger purchase, you want to feel that you are getting something meaningfully better, not just a longer specification sheet. This is where we believe Nothing has a strong advantage,” he added. “Our recent Phone (4b) delivered our biggest smartphone opening to date and became Flipkart’s best-selling smartphone above Rs 30,000 on Day One,” Evagelidis said.

Apple sees AI as integral to the existing smartphone experience. Craig Federighi, Apple’s senior vice-president of software engineering, said in a blog post: “Truly helpful AI must be centered on our users’ needs, deeply integrated into the products they rely on every day, grounded in personal context, and built with privacy at every step.”

OPPO sees the shift particularly in how users interact with the phone. “While camera and design will always remain important, consumers are increasingly looking at how intelligently a smartphone can adapt to the way they work, create, travel and go about their day,” said an OPPO India spokesperson.

Samsung is taking the argument beyond the individual handset and towards the wider ecosystem. “AI is getting smarter faster, and this will continue. But to change how people live, it must answer: where, how and into whose hands does this intelligence reach? This will define AI’s next chapter,” Samsung Electronics CEO and President TM Roh wrote in a blog post.

That ecosystem is becoming increasingly relevant as smartphones face competition from devices that can perform functions once associated mainly with the phone. Smartwatches handle health tracking, earbuds handle calls and voice interactions, laptops increasingly have AI assistants and smart glasses are being developed for navigation, translation and contextual information. Even OpenAI is reportedly preparing an AI-first consumer device, developed with former Apple design chief Jony Ive’s LoveFrom studio and expected in 2027. The first device is expected to be compact and screenless, while OpenAI’s longer-term ambition is reportedly to develop hardware that could eventually replace the smartphone.

For now, the smartphone remains the central device because of its portability, connectivity, app ecosystem and ability to integrate with other devices, according to Counterpoint’s Chawla.