AI will kill the smartphone as we know it. Here's why!

Smartphone innovation has been terminally ill for years

It's tempting to focus on the past few years and say that things haven't been like that in the past and that smartphone innovation is now almost nonexistent. But the fact of the matter is that in the past 15 years or so, the changes from model to model have been very few and far between.

But okay, let's take the last two or three Galaxy S-series models for the purpose of this article. Below, you'll find a comparison table between the Galaxy S22, S23, and S24. They are almost the same! The newer models feature slightly bigger batteries, new chipsets, and brighter screens, and that's about it!

 
Now, the reasons behind this are complex, but now that AI is spreading through smartphone brands like a cybernetic COVID-24, things will get even worse. Here's why.

Smartphones as terminals and software as a service

Samsung has Galaxy AI, Google has Gemini, and Apple will soon have its own AI, probably bearing some hip name. These systems, albeit far from real intelligence (or artificial for that matter), can do wonders with optimizing and interpreting huge amounts of data.

You snap a photo, and the algorithm instantly makes it look like anything you want. The same goes for the images and videos on your screen. You can make these AI systems write mail, transcribe and translate text, shop for you, and manage the battery life on your phone.

And what are the prime things we do with our smartphones nowadays? Snap photos, browse the internet, watch videos, chat, and communicate, and create stuff or get some work done on rare occasions. AI can now do most of these, or help tremendously, and no matter what companies are trying to make you believe, most of the processing is in the cloud.

So, why pay for all that hardware R&D, manufacturing, keeping factories running, and buying raw materials to produce a phone that is basically the same as the previous one? The obvious answer is "because that's what people want, and they will buy it." I think there's a sudden and powerful change in the mindset of most people happening.

People are fed up with these incremental upgrades and want to keep their phones for longer. Google was the first company to sense this change and react by offering seven years of support for the Pixel 8 lineup. And Samsung responded accordingly. And these companies will be the first to start offering "smartphone as a service" models.

What will happen, then?

The way I see it, it's already happening. Samsung hinted that Galaxy AI will be free only until 2025, probing the ground for a paid model, and if it proves successful, expect others to follow. Don't like the photo quality on your Pixel 7 Pro? Buy the Gemini Nano Ultra subscription or upgrade, and AI algorithms will fix that.

People buy a new phone every two or three years, on average. According to Statista, the average price of a smartphone in the US last year was $823. And we're not even taking into account trade-ins and deals. That's roughly $274 a year, and we have to factor out the production cost, shipping, and other expenses to come to the final net profit for the smartphone company.

Those $274 spread over a 12-month period equals around $23/mo. That's exactly what Netflix Premium costs in the US per month. You get the picture: companies will profit much more from selling AI subscriptions than real phones. Maybe they'll try to do both, but in the end, we might end up with just hardware terminals, called Galaxy AI, Gemini, Pixie, Siri, or whatever, and accessing powerful AI systems through these for a monthly fee.

Actually, the harbinger of AI terminals is already among us. The Rabbit R1 created ripples throughout the industry, offering a glimpse at what's to come. This might be the future of the gadget we used to know as "smartphone."

Do you think this is even remotely possible? Is the end of the smartphone as we know it nigh? I know the idea may sound very radical at first glance, but if we look with a cold, objective eye at where the world is going with the software as a service model, it suddenly starts to sound less radical. Let us know in the comment section below!