Mobile Artificial Intelligence Market

Market Overview

The global mobile artificial intelligence market size was valued at USD 18.2 billion in 2023 and is projected to reach a value of USD 125 billion by 2032, registering a CAGR of 28.8% during the forecast period (2024-2032). One of the major drivers augmenting the market is the increasing processing power of mobile devices. 

Mobile artificial intelligence (AI) integrates AI technologies into mobile devices like smartphones and tablets. It offers devices the ability to comprehend, analyze, and react more intelligently to data and user interactions. Natural language processing, voice recognition, computer vision, and machine learning algorithms tailored for mobile platforms are all examples of mobile AI. In the mobile artificial intelligence (AI) market, cutting-edge technologies continually reshape user experiences. The synergy between AI and mobile technology fosters unprecedented convenience and efficiency, from advanced natural language processing enabling seamless voice assistants to innovative machine learning algorithms enhancing predictive capabilities. Embracing these innovations, users engage with their devices in increasingly intuitive and personalized ways.

The prominent availability of AI tools and frameworks fuels the market growth of mobile artificial intelligence (AI). Mobile devices generate vast amounts of data, such as images, videos, and text, which can be used to train AI models. The development of the Internet of Things (IoT) contributes to data availability by generating data from different sources, such as sensors and connected devices. Hence, emerging data collection is also a significant factor in market growth.

Highlights

• Software held the largest share of the market by component.
• 10nm led the market by technology node.
• Smartphones generate the highest revenue share through the application.

Market Dynamics

Global Mobile Artificial Intelligence Market Drivers:

Emergence of Edge Computing

One novel development influencing the market's growth is the growing need for edge computing in the Internet of Things. In an edge computing network design, data is processed and stored close to where it originated. The content saved locally on the client's computer is an advantage of edge computing. This helps reduce latency and improve response time. IoT is an ecosystem of interrelated computing devices, objects, and machines that perform tasks without human intervention. IoT device suppliers are integrating HMI technologies in devices like cameras, drones, smart speakers, smartphones, and intelligent Televisions (TVs). This leads to deploying AI chips in mobile devices, enabling power-efficient data processing and machine learning (ML) computation.

Moreover, the AI chips integrated into these devices enable them to make real-time decisions. This market trend and analysis is expected to increase the use of AI in IoT devices, including mobile. Hence, vendors are introducing new AI chips, Crypto chips, and platforms at the edge for IoT devices. Thus, the increasing use of edge in IoT will drive the adoption of AI chips in IoT devices and expand the market's growth during the forecast period.

Advancements in AI Technology and Rising Demand for AI-Enabled Services

Continuous advancements in AI algorithms, notably in machine learning and natural language processing, enhance the sophistication and effectiveness of AI-powered mobile applications. These advancements enable mobile devices to perform complex tasks with greater accuracy and efficiency, driving innovation and delivering more intelligent and personalized experiences to users worldwide, driving market growth.

Additionally, there is a rising demand for AI-enabled mobile services such as language translation, image recognition, and augmented reality applications. These functionalities enhance user experiences, enabling seamless communication, advanced visual capabilities, and immersive interactions. Integrating such services into mobile platforms reflects evolving consumer preferences and drives innovation in the mobile AI market.

Global Mobile Artificial Intelligence Market Restraints:

Fragmentation of Platforms

The fragmentation of platforms in the mobile market, spanning diverse operating systems such as iOS and Android, alongside numerous device manufacturers, poses a significant challenge for AI developers. This fragmentation hampers market growth by complicating the creation of seamless AI applications across platforms and devices, increasing development costs and hindering widespread user adoption.

Shortage of AI Experts

Inadequate availability of AI experts is a significant challenge hindering market growth. The demand for AI chips is growing owing to their potential benefits. However, the need for more workers with technical expertise in AI is hampering the growth of the mobile artificial intelligence (AI) systems market. Because AI has expensive research and development expenditures, businesses must consider all factors before integrating it. Businesses typically turn to highly skilled AI experts for information. Several recently established businesses with limited funding have indicated that the biggest obstacle to integrating AI into their operations is a need for more qualified personnel. The need for more professionals with the necessary understanding of AI technology makes it difficult to analyze an organization's market growth.

However, firms must prioritize talent acquisition and cultivation efforts by hiring people with excellent technical expertise. To support the retention of AI practitioners, they also need to invest in skill and training programs. However, implementing AI in businesses is constrained by a need for more trained workers, AI engineers, and technicians. This could impede the market's growth throughout the projected period.

Global Mobile Artificial Intelligence Market Opportunity:

Rise of Natural Language Processing (NLP)

NLP is increasingly common in mobile AI, enabling voice commands and natural language interactions. It drives voice recognition, language translation, sentiment analysis, and text summarization. These capabilities enhance user experience, making mobile devices more intuitive and versatile in understanding and responding to human language queries and commands.

Rising Usage of AI Chipsets

Mobile device manufacturers are crafting specialized AI chipsets to enhance performance and energy efficiency for AI tasks. These chips expedite on-device AI computations, resulting in quicker inference and prolonged battery life. This innovation marks a significant advancement in mobile AI capabilities, catering to the growing demand for efficient and powerful AI-driven experiences on smartphones and tablets.

Regional Analysis

The global mobile artificial intelligence market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

North America Dominates the Global Market

North America is the most significant global mobile artificial intelligence market shareholder and is estimated to grow at a CAGR of 28.2% over the forecast period. One of the reasons for the mobile artificial intelligence market growth in North America is the rapid implementation of advanced technologies. In addition, the availability of a solid wired and wireless communication infrastructure, high Internet penetration, and a well-developed ecosystem of IoT devices are leading to the development of AI for IoT devices.

Additionally, US-based major smartphone original equipment manufacturers (OEMs) such as Apple and Google heavily invest in Research and Development (R&D) to develop innovative products. This region also benefits from significant venture capital financing, further driving technology development and utilizing real-world data, creating a virtuous circle that fuels market expansion. Additionally, the proliferation of drones generates vast amounts of drone-generated data, contributing to advancements in the global mobile artificial intelligence (AI) market.

In addition, Apple's implementation of AI chips in its flagship smartphones is expected to accelerate the adoption of AI chips in other IoT devices. Apple integrated A13 Bionic AI chips in its latest iPhones, including iPhone 11 and iPhone 11 Pro. The growing demand for smart home speakers such as Google Assistant and Amazon Alexa is also expected to attract investments in AI chips. The abovementioned factors will drive the market growth in this region during the forecast period.

Asia-Pacific is projected to expand at a CAGR of 27.9% over the forecast period. Asia-Pacific is home to a large population of tech-savvy individuals who are early implementers of mobile technologies. The growing smartphone penetration and internet connectivity in nations like China, South Korea, India, and Japan have generated a substantial user base for mobile AI applications. Also, the Asia-Pacific region has a flourishing startup environment, with many creative enterprises focusing on AI development and mobile technologies.

Furthermore, the availability of skilled labor, government programs promoting AI research and development, and welcoming investment cultures have all contributed to the expansion of the region's mobile AI industry. Additionally, the Asia-Pacific region's growing digitalization of sectors like finance, healthcare, and e-commerce has opened up new possibilities for mobile AI applications and increased demand for AI-powered mobile solutions.

Segmental Analysis

The global mobile artificial intelligence market comprises components, technology nodes, and applications. 

The market is further segmented by components into hardware, software, and services. 

The hardware segment generated the most mobile artificial intelligence market revenue. The rising use of AI on mobile devices has raised the need for robust and effective hardware solutions with significant processing capacity. Improvements in semiconductor technology, such as the development of smaller process nodes (10nm, 7nm), have enhanced AI performance while consuming less power, making integrating AI-specific circuits into mobile devices feasible.

Machine learning algorithms are another important software element that forms the backbone of mobile AI apps. Machine learning algorithms help devices learn from user behavior, adjust to preferences, and provide personalized experiences. From predictive text input to image recognition to recommendation systems, ML improves mobile devices' overall intelligence and performance. Additionally, computer vision software enables mobile AI to process and act on visual data. This element is essential for augmented reality (AR) and facial recognition applications, improving user experience and security on mobile devices. These factors under the software segment will drive the market growth during the forecast period.

The market is bifurcated by technology node into 7 nm, 10 nm, 20-28 nm, and others.

The 10nm nodes segment is analyzed to grow at the highest rate in the Mobile Artificial Intelligence Market during the forecast period. With the 10 nm technology, mobile processors have become substantially smaller and more energy-efficient than their predecessors. This size reduction allows for the integration of more transistors within the same physical space, leading to enhanced processing power. Mobile devices powered by 10 nm chips exhibit improved performance, enabling seamless execution of complex AI algorithms. This is particularly important for AI applications that demand real-time processing, such as voice recognition, image analysis, and augmented reality experiences.

The 7 nm technology node is experiencing significant growth and is considered the fastest-growing mobile artificial intelligence (AI) segment. This is primarily due to its ability to provide even higher transistor density and improved performance compared to the previous technology nodes. The smaller size of transistors in the 7 nm node enables mobile devices to handle complex AI workloads more efficiently, resulting in faster processing speeds, enhanced AI capabilities, and improved power efficiency. The 7 nm technology node is driving the development of advanced mobile AI applications and supporting emerging technologies such as AR, VR, and machine learning on portable devices, further fueling its growth in the market.

The global mobile artificial intelligence market is segmented by application into smartphones, cameras, drones, automobiles, robotics, AR/VR, and others.

The AR/VR segment dominated the global market during the forecast period. The Augmented Reality/Virtual Reality segment is expected to experience significant growth during the forecast period in the mobile artificial intelligence (AI) market. This growth can be because of the rising implementation and integration of AR and VR technologies into mobile devices.

Additionally, AR/VR applications require powerful AI algorithms to deliver immersive and interactive experiences, including object recognition, spatial mapping, and gesture recognition. The combination of AI and AR/VR enables advanced features such as virtual try-ons, real-time information overlays, and interactive gaming experiences. The growing demand for AR/VR applications in various industries, including gaming, entertainment, e-commerce, and education, is driving the expansion of the AR/VR segment in the mobile AI market.

The smartphone segment is expected to grow moderately during the forecast period, owing to the saturation in the global market. The mobile artificial intelligence market is witnessing a decline in the unit shipments of smartphones due to the lack of innovation. AI processors with quicker data processing speeds must integrate new, cutting-edge technology. Although these technologies are present in most smartphones, the processors built into these devices must support these applications effectively.

As a result, smartphone consumers see AI technologies as improving their electronic devices. As a result, smartphone OEMs are making significant investments in creating AI chips, which can incorporate and use cutting-edge technology in smartphones. Thus, during the projection period, market expansion will be driven by these factors within the smartphone sector.

Recent Developments

• February 2024- OpenAI announced ChatGPT-4, boasting improved conversation and reasoning skills. This promises more natural and engaging interactions with voice assistants and chatbots.
• January 2024- Apple released iOS 16.3 with Focus Filters, allowing users to personalize app access across different Focus modes (work, personal, etc.). 
• January 2024- Samsung's Bixby assistant gained offline language translation capabilities, helping users communicate without internet access.