Are consumers ready for AI-powered smartphones?

With the iPhone 16 set to launch this September, Apple is positioning AI as a central feature, enhancing user experiences such as writing, device performance, and photo editing, while also improving Siri. Apple is not alone in this; both Google and Samsung have embedded AI into their latest smartphone offerings.

The question is: are consumers ready for smartphones that heavily rely on AI? This is a question that Michael Zema, Corporate Communications, Amdocs poses.

A growing generational divide in AI readiness

Amdocs' survey of 1,000 US consumers reveals a generational divide when it comes to awareness and enthusiasm for AI in smartphones. Nearly half of Gen Z (45%) are aware of the Apple Intelligence platform, compared to just 14% of baby boomers.

Moreover, this awareness translates into purchasing intent. While 41% of all respondents say AI integration makes them more likely to buy a new smartphone, the figure jumps to 52% for millennials and 59% for Gen Z. Younger consumers are clearly more inclined to see AI as a significant factor when considering a smartphone upgrade.

There’s also a generational gap in terms of interest in using AI-enabled features. Sixty-five percent of Gen Z and 70% of millennials say they are likely to explore AI functionalities, compared to 40% of baby boomers.

Consumer priorities for AI in smartphones

While the survey shows growing excitement for AI, consumers are clear about what they want from this technology. More than half (56%) of respondents indicated that seamless AI integration is essential for them to adopt it.

In terms of specific features, privacy and security top the list, with 51% of consumers seeking enhanced protections in their AI-enabled devices. Improved photo and video editing tools are also high on the agenda, with 48% of respondents listing them as a key feature. However, the balance between innovation and data security remains a pressing issue, with 75% expressing concerns about how AI handles personal data.

Trust and security: a major hurdle

Although AI is becoming more common in smartphones, trust remains a key barrier to widespread adoption. Sixty-nine percent of respondents voiced concerns about how their data is used in AI-driven devices. This issue is compounded by a lack of consumer awareness: 31% of respondents admitted they are not fully aware of the security measures in place on AI-powered smartphones, and 21% said they were unaware entirely.

Despite these concerns, 48% of consumers still believe that AI will enhance their smartphone experience. If companies like Apple, Google, and Samsung can effectively address privacy concerns, they may further increase consumer confidence in AI-powered technology.

Anthony Goonetilleke, Group President of Technology and Head of Strategy at Amdocs, noted: "While nearly half of consumers recognize the potential for improved smartphone experiences through AI, there is also a clear demand for advanced privacy and security features. This dual focus on innovation and addressing consumer concerns will drive the future of AI adoption as it becomes incorporated into our daily lives."

The future of AI-enabled smartphones

As Apple, Google, and Samsung continue to embed AI into their devices, the technology is set to become a key differentiator in an increasingly competitive market. For consumers, AI promises more intuitive and capable devices that transform everyday tasks. For tech companies, the challenge is to deliver these experiences while addressing the legitimate concerns of their users.

As AI continues to evolve, consumer expectations will follow, making the next few years crucial for the smartphone industry. Whether consumers are excited or cautious about AI, its integration is poised to reshape the smartphone experience for good.