Ahead of IFA — the Berlin trade show for consumer electronics and home appliances — Gartner research vice president Annette Zimmermann shares her thoughts on the increasing challenges vendors face and upcoming trends in the personal technologies market.
Will AI dominate IFA this year?
I expect there will be several AI-enhanced product announcements. Although many vendors continue to create more hype around AI hype than there is in reality, AI technology holds a lot of promise. Gartner predicts that by 2020, 20% of citizens in developed countries will use AI assistants to help them with an array of operational tasks.
Take, for instance, Samsung. Ahead of IFA, the company announced its long-expected Bixby-enabled smart speaker, the Galaxy Home. The device represents a milestone for the company as it is finally entering the smart speaker space. However, more enhancements are needed for the virtual personal assistant (VPA) to make an impact in users’ homes, such as integrating Bixby with common apps like Uber to complete certain tasks.
“ By 2020, 20% of citizens in developed countries will use AI assistants to help them with an array of operational tasks”
From more established vendors, we can expect to see AI enhancements to their product portfolios. For example, Huawei’s processor Kirin: We might see the next generation, Kirin 980, unveiled this year; also, new editions to the LG ThinQ series.
With so much AI on the docket, what AI trends interest you the most?
I am particularly keen to visit Hall 26 where IFA NEXT, the startup area, will be located. I expect to see personal assistant robots, those that can sense our emotions, and lots more new devices using emotion AI. What’s exciting about the startup space is the continual M&A activity. Tech leaders such as Google, Apple and Samsung are actively looking to acquire AI startups.
How can smartphone vendors launch new models amid challenging market conditions and remain “in the game”?
These tough conditions are making it harder for smartphone vendors to achieve annual double-digit growth. Gartner estimates the global smartphone market will reach a 3-5% annual growth for the next five years, with mature markets such as North America and Western Europe showing flat growth. Vendors’ opportunities are limited by various factors, including user behavior. For instance, more users are lengthening replacement cycles by up to six months.
Vendors are responding to these market conditions in two different ways:
- Leading vendors such as Huawei, Samsung, Apple and LG, which sell high-end smartphones in the price segment of €800 and above, are increasing their price tags to improve profitability. Apple has already taken this path, and Huawei and Samsung are following its example. Raising prices is a complex business as it always bears the risk of losing customers. An increase in price needs to come with truly new, leading-edge technology and innovative features, or why would users want to pay more?
- Android vendors such as Oppo, Vivo and Xiaomi, which target the midtier segment, will continue to offer an increasingly rich feature set at an aggressive price in order to drive smartphone replacements.
In general, smartphone vendors need to focus their innovation efforts toward technology that presents direct value to the user, including camera technology as well as new user experiences such as AI-based VPAs. At the same time, we can expect smartphone vendors to revisit and possibly rationalize other technology features; for example, focusing on just one biometric input sensor.