New Trends in Mobile Phone Industry: A Game of AI, Chip Cost and Pricing

New Trends in Mobile Phone Industry: A Game of AI, Chip Cost and PricingAs Double 11 approaches, competition among mobile phone manufacturers is becoming increasingly fierce. Top brands like vivo, OPPO, Xiaomi, and Honor have all released their annual flagship products, vying for market share

New Trends in Mobile Phone Industry: A Game of AI, Chip Cost and Pricing

As Double 11 approaches, competition among mobile phone manufacturers is becoming increasingly fierce. Top brands like vivo, OPPO, Xiaomi, and Honor have all released their annual flagship products, vying for market share. Among them, Xiaomi and Honor opted to equip their devices with Qualcomm Snapdragon 8 Gen 2, while OPPO and vivo premiered the Dimensity 9400 chip. Notably, the pricing of new phones this year is generally higher than their predecessors, sparking industry discussions on cost and pricing.

The rising cost of chips is a major factor driving the price increase. Many top executives admitted that the continuous increase in chip costs has put enormous pressure on product pricing. Wang Teng, Deputy General Manager of Xiaomi's China Market Department, stated that product pricing is facing challenges at the end of this year. Everyone wants more features at the same price, but it's really hard. Xiaomi's 15 series entry-level model boasts upgraded configurations, but its price has also jumped to 4,499, a 200 increase from the previous generation. Lei Jun, Chairman and CEO of Xiaomi Group, explained that they decided to eliminate the 8GB version to maximize the demonstration of on-device AI capabilities.

The overall price of OPPO Find X8 series is also 200 higher than the previous Find X7 series, while the price increase for Honor Magic7 series is relatively moderate at only 100. Zhao Ming, CEO of Honor, said the company will adhere to its original design and pricing rules, but he acknowledges that industry cost increases are a reality and companies need to address them through innovative solutions. He provided an example, "Honor uses a heterogeneous computing approach combining NPU and GPU, which allows us to lower the chip cost by utilizing the NPU. I believe other manufacturers will have their own solutions and approaches in the future."

Beyond pricing, manufacturers are also introducing ultrasonic fingerprint recognition technology to their flagship models. This technology, first launched globally by Qualcomm, boasts advantages such as faster recognition speed, low power consumption, and recognition unaffected by screen transparency. It enables quick unlocking in various environments. Xiaomi, vivo, iQOO, and other brands have already equipped multiple models with ultrasonic fingerprint solutions provided by Goodix. Industry insiders point out that ultrasonic fingerprint technology, previously held by one company, is priced more than twice as high as mainstream in-display optical fingerprint modules. This requires manufacturers to independently develop and debug algorithms, leading to higher costs.

As screen pixel density continues to increase and light transmittance weakens, ultrasonic fingerprint recognition solutions will gradually replace in-display optical fingerprint solutions, becoming the mainstream trend. Hu Yuahua, President of Goodix, stated, "As screen technology without polarizer penetrates faster, ultrasonic fingerprint will play a more critical role in smart terminals. Goodix focuses on delivering cost-effectiveness and stability to accelerate the global adoption of ultrasonic fingerprint technology."

AI has become a standard feature in today's flagship phones. Manufacturers are actively integrating AI large language models into their devices, applying them to areas such as imaging and interaction. Xiaomi introduced the XiaomiAISP, an AI large model computing photography platform. vivo launched the AI multi-frame high-pixel algorithm, and the OPPO Find X8 series unveiled AI Thousand-Mile Long Focus technology.

The official inclusion of AppleIntelligence in Apple devices has also driven further development of on-device AI applications among domestic manufacturers. It has introduced multimodal interaction methods, encompassing text, voice, and images.

Xiaomi introduced Super XiaoAi on the latest version of its operating system, Pengpai OS 2.0, enhancing its contextual understanding capabilities and personalized recommendation system. Users can quickly fill in personal information using Super XiaoAi, and find various content within smart devices with a single voice command.

The OPPO Find X8 series boasts a one-click Ask Screen feature, supporting interactive inputs from voice, text, and images, enabling multi-document upload analysis and question answering. Liu Zuohu, OPPO's chief product officer, remarked, "In the AI era, technology and models are changing rapidly, exceeding our expectations. We hold weekly AI special meetings to exchange ideas, keep up with technological advancements, and determine what products to create. Otherwise, the products we make will quickly fall behind.

Honor Magic7 series debuted the YOYO intelligent agent, which, based on AI vision, can interact within its own applications and collaborate with third-party applications. During a live demonstration, Honor CEO Zhao Ming used this feature to place an order for 2,000 cups of coffee from Luckin Coffee with a single command. This series also introduced an on-device fake face fraud detection feature to combat AI-based face swap scams.

Industry experts point out that the AI capabilities currently implemented by various phone companies are based on secondary development utilizing AI interface capabilities provided by chip manufacturers. Both MediaTek and Qualcomm chips offer on-device AI video generation features, prompting most manufacturers to develop "AI dynamic wallpaper" functions based on this capability.

Zhao Ming stated, "The AI era OS framework built by Honor is dual-core. While each company uses different terms, everyone will be exploring and following this direction for a while. However, I believe that AI features from different companies will not become homogenized but will instead flourish, creating a diverse landscape."

In conclusion, rising chip costs, the application of AI technologies, and diverse user demands are jointly driving a new round of competition upgrades in the mobile phone industry. Manufacturers face dual pressure on cost and pricing when releasing flagship products. Balancing cost, technology, and user experience will be crucial in determining the future market landscape.