In recent years, the replacement cycle of domestic mobile phone users has been extended, and market competition has become fierce. The emergence of AI technology has opened up new space for the industry, but the industry believes that the breakthrough of mobile phone manufacturers still needs to rely on technological innovation. AI is stirring up the high-end smartphone market. Recently, many "fruit fans" have been consulting in stores about the recently released iPhone 16. Some consumers place pre orders on the spot through their mobile phones under the guidance of staff. At present, the industry generally believes that the iPhone 16 series has not brought disruptive innovation, but has strengthened the performance of various components and deeply integrated AI (artificial intelligence) intelligent assistants. Despite the performance improvement, this incremental update did not fully meet the high expectations of some users. A person in charge of Rongyi Investment said that although the performance of the Chinese market has fluctuated, Apple has always held a pivotal position in the global smartphone market. "Apple is still an important participant in the domestic high-end smartphone brand. In the short term, many domestic smartphone brands are still unable to pose substantial challenges to it." "From a global shipping perspective, Apple's market prospects are still relatively optimistic." Li Zegang, chief analyst of Omdia Consumer Electronics, a market research company, believes that the main target markets for iPhone 16 are developed regions such as Western Europe, North America, Japan and South Korea, and the demand in emerging markets such as India is also increasing, which to some extent offsets the decline in sales in the Chinese market. Maintaining superior hardware product performance and ultimate software product experience has always been the key to competition in the mobile phone industry. The fundamental reason why Apple has been able to consistently dominate the high-end mobile phone market with profits exceeding all other brands is that it has almost integrated all the advantages of various functions. So, we see that numerous mobile phone brands are competing in various dimensions such as imaging, screens, and algorithms. But once the performance reaches a certain level, the innovation of mobile phone manufacturers begins to weaken, and it is difficult for consumers' experience to improve significantly. The emergence of AI has enabled mobile phone manufacturers to find new competitive points and actively embrace AI. Last November, OPPO applied its self trained Andes large model capability to ColorOS 14. The OPPO Find X7 released this year now supports one click AI call summarization, which can intelligently recognize call content, generate key information summaries, and quickly record contact information and other information after the call ends. In July of this year, Honor released smartphones such as Honor Magic V3, which are equipped with AI defocusing eye protection technology. Through AI learning of users' eye environment and habits, optical algorithms can be reconstructed to help users soothe their vision while looking at their phones. AI drives smartphones to return to high speed. The industry generally believes that AI smartphones are the third stage of the mobile phone industry after feature phones and smartphones. OPPO Chief Product Officer Liu Zuohu said that in the era of AI, the mobile phone industry and user experience will undergo revolutionary changes. 360 Chairman Zhou Hongyi believes that 2024 is the first year of AI smartphones, and big models will drive smartphones into the 2.0 era. Mobile phone manufacturers that do not turn to AI will become the next "Nokia". However, as the core selling point of the new generation of smartphones, there are significant differences in the performance of AI, especially generative AI, between old and new phones. Among them, old phones are limited by the insufficient AI computing power of processors, often only able to achieve some functions through cloud AI, while the new generation of AI phones have sufficient local computing power and can deploy local AI models to call the underlying functions of the phone. In addition, local AI models can also achieve deep integration with local system services, allowing users to quickly call different functions and services through voice, gestures, and other means. Obviously, by utilizing the processing capabilities of AI models in text, visual, and other aspects, the new generation of AI smartphones can achieve more convenient functions without significantly increasing hardware costs. With the innovation brought by AI phones in terms of user experience, AI phones are expected to trigger a wave of phone rotation in the next two years. According to IDC's forecast, by the end of 2024, generative AI smartphones will achieve explosive growth of 344%, with a market share expected to reach 19% and shipments exceeding 234 million units. Technological innovation remains the core of future competition. After experiencing the industry downturn in the previous two years, the Chinese smartphone market shows signs of recovery in 2024, with expected annual sales exceeding 270 million units, a year-on-year increase of over 3%. AI technology represented by large models is being applied in the field of mobile phones, bringing new development momentum to the industry. Jibang Consulting and Analysis's Teacher Bo Yu stated that the current mobile phone market is becoming mature and saturated, and there is limited room for breakthroughs in existing specifications. Therefore, for manufacturers, changing product forms in hardware, such as developing foldable screens or other innovative forms, may be a major direction for the future. In terms of software, AI continues to be a hot topic in the market. How to better integrate AI resources, provide more comprehensive services, and create better user experiences is also another major development focus. The future development trend of the mobile phone industry indicates that technological innovation, market demand, and brand strategy will be the core driving forces to help major manufacturers stand out in the fiercely competitive market The head of Rongyi Investment stated that the key directions for innovation in smartphone technology include deep integration and application of AI technology, popularization and cost reduction of foldable screen phones, significant improvement in phone battery life, and gradual integration with AR technology, which will bring consumers a new interactive experience. At the market level, manufacturers need to closely monitor the diversity of the global market, provide localized content and services, as well as distinctive accessories, to meet the specific needs of users in different regions. As for brand strategy, major manufacturers also need to form a unique brand positioning, focusing on creating products with accurate positioning and strong innovation, avoiding blind expansion, and thus gaining a competitive advantage in the fierce market competition. In response to the current trend of mobile phone manufacturers deploying AI applications, Li Zegang believes that it is still an early phenomenon. If AI is meaningful to terminal manufacturers, two conditions need to be met: first, there must be high stickiness application scenarios, and second, it must form a scale. Only after scale can more commercial profits be earned. However, many manufacturers have not yet formed a true commercial closed loop in this regard. He believes that the current breakthrough direction for domestic mobile phone manufacturers is to "go global" and expand the replacement and new purchasing needs of emerging markets; The second is to further strengthen product innovation and maintain its market share and user base. Nowadays, the gross profit of the mobile phone industry is already very low, and mobile phone manufacturers are more concerned about user experience. On this basis, they can better expand backward revenue such as software operation and advertising distribution. (New Society)