Indians aren’t paying more just for AI in phones, but laptops may hold key

This was hardly the first—in the past one year, Google has ramped up in-device AI availability on its Pixel phones with its AI platform—Gemini. Samsung, in January this year, brought along Galaxy AI—a suite of features that add AI across voice calls, audio recording, photography, general web browsing and more. And, in the past two months, China-headquartered Oppo and Xiaomi have also made moves to bring similar AI features to their phones, too.

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The five brands mentioned above control over 45% of India’s $40-billion smartphone market. But, they have a problem: Despite heavy marketing to push AI as the next big thing, consumers aren’t buying it.

Industry analysts, consultants and retailers that Mint spoke to all concurred that while it is still early days for AI in consumer devices, smartphone makers are likely to struggle to convince Indian buyers that the AI features in question are truly innovative. Instead, laptops running native and on-cloud AI features could hold the key to bringing the new smarts to the masses—giving personal computer sellers potential room to boost revenue even as smartphone sales stutter, at least for the next one year.

 

One of the biggest reasons for this divergence in potential sales of AI-enabled smartphones and laptops is the use cases that AI offers across these two devices. In a phone, AI features offer live transcription, translation, photo and audio editing, and prioritization of notifications as its key features. Meanwhile, laptops—which come with significantly higher computing power than smartphones, have greater productivity use cases, while including most of the features that AI on smartphones can bring.

Navkendar Singh, associate vice-president for client devices at market research firm International Data Corporation (IDC) India, said that it is because of this that for consumers, it is laptops that are likely to lead adoption. “Most AI features on smartphones aren’t differentiators—they are enablers, but transcription is unlikely to be used by all. In comparison, laptops have far greater and more versatile use cases within AI itself, which include coding, content creation, and everything else that smartphones can do. Within the first half of the calendar year 2025, this is going to start showing," he said.

Singh’s assessment will be key to the growth of the market in terms of its value—even as volume remains a tricky challenge for brands.

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As of last year, brands shipped around 10 million laptops to retailers in India, amounting to approximately $5.5 billion in revenue at an average selling price of ₹45,000 ($540) per unit—as per Mint research collated from three market analysts. IDC India said on 20 February that shipments of tablets and PCs, of which laptops account for nearly 70% , fell 6.6% year-on-year by volume to 13.9 million units in 2023.

All the three analysts that Mint spoke to agreed that laptops are likely to see a mid-single digit growth in shipment by volume this year, while the influx of AI could drive up average selling price by 10-15% in this year itself. As a result, the laptops market in India could generate around $6.5 billion in revenue this year, thereby adding $1 billion in incremental revenue even amid a downturn in consumer demand.

Laptops will gain edge

Tarun Pathak, research director at Counterpoint India, concurred. “Laptops will get more chips by power and volume in the immediate future in order to accommodate the AI use cases. As a result, laptops are likely to go through an uptick in their prices, and buyers are going through both incremental device refresh cycles as well as genuine, organic interest in AI features, as Microsoft guided during its Build conference two months ago. This can boost the overall consumer industry," he said.

The same, however, cannot be said of smartphones. Faisal Kawoosa, founder of tech consultancy firm Techarc, said, “For smartphone brands, most AI feature launches are marketing exercises. It’s important because there is little tangible innovation, as a result of which AI is the only way in which brands can justify maintaining price points in their new generation devices. For users, there’s little tangible features, and buyers are thus not paying for new devices just based on AI."

Manish Khatri, partner at Mumbai-based retailer Mahesh Telecom, said that since the launch of AI photo editing and transcription features in Google Pixel 8 series of smartphones in 2023, “buyers are not really coming in and asking for new devices based on AI features—AI hasn’t been a reason for buyers to upgrade across price points."

In this calendar year, the three analysts projected a mid-single digit growth in smartphone shipments—with brands potentially set to ship 153 million smartphones. At an average selling price of $265 ( ₹22,000) per unit, the smartphone industry is expected to clock $40 billion in revenue this year.

In comparison, the smartphone industry was valued at $39 billion in 2023. This is a clear marker of AI failing to make a significant dent in the market at least as of this year—at least in the immediate two quarters going forward.

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