The Smartphone's Uncertain Future in an AI-First World

The smartphone industry faces mounting pressure from multiple fronts as AI-native companies pursue alternative device categories. OpenAI, Meta, and Amazon are each developing hardware strategies designed to shift consumer interactions away from traditional mobile interfaces. While the installed base of smartphones remains dominant—with Apple alone shipping an estimated 250 million iPhones annually—structural challenges including memory chip pricing, foundry capacity allocation, and platform economics are creating vulnerabilities. The outcome will likely not be a wholesale replacement of smartphones but rather a redistribution of screen time, data access, and revenue streams. For investors, the key question is whether incumbents can successfully integrate AI capabilities before challengers establish meaningful market positions in wearables, voice interfaces, and ambient computing.

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