Mobile Artificial Intelligence Market - Growth, Trends, and Forecasts (2022 - 2027)

The mobile artificial intelligence market was valued at USD 2.14 billion in 2021 and is expected to reach USD 9.68 billion by 2027, at a CAGR of 28.65% over the forecast period (2022- 2027). Virtual assistants and bots will become more widespread and smart in the near future, freeing employees from monotonous tasks like answering simple questions or performing routine tasks. As for the assistants, Amazon already introduced Alexa Shopping and more such virtual helpers, programmed to do a specific range of tasks to make lives easier.

Key Highlights

• The rise of cognitive computing and the growing number of AI applications drive the market. Technologies like AI and ML enable cognitive computing systems to analyze a tremendous volume of data, generate insights, and use them as a learning experience to optimize results. More and more industries and organizations are leveraging cognitive solutions to enhance their operations, like data volume, insight generation, action planning, and management, which increases productivity.
• Artificial Intelligence (AI) has permeated and disrupted the IT industry across various end-user industries worldwide. AI leads to remarkable breakthroughs for businesses and their customers. With the influx of technological developments such as virtual assistance, self-driving cars, chatbots, etc., AI is expected to disrupt the way mobile devices are used. A machine that operates with a degree of autonomy needs to, in some sense, be able to understand its surroundings.​
• The major factors driving the market's growth are the surge in artificial intelligence applications across the various end-user industries and the increasing need for cognitive computing and automation trends. Also, with the widespread use of various mobile devices in day-to-day operations, such as at workplaces, in education, and for personal use, the need to automate these devices without human intervention is increasing.
• With digitization, the dependence on mobile devices is increasing the BYOD trends in the workplace, stimulating the increase in the use of mobile devices. Also, the increased usage of mobile devices to make important decisions due to the increased dependency on these devices is further stimulating the need for AI in these devices in automated decisions.​
• Furthermore, the growth of connected devices due to IoT is augmenting the need for AI-assisted control of these devices. Moreover, the increasing demand for AI-capable processors and chipsets in these devices is driving market growth. This is because the most critical aspect of implementing AI in a mobile device is integrating the technology into the chipsets.
• The rise of COVID-19 created huge opportunities for the growth of the mobile AI market worldwide. The increasing use of AI in the health care and self-diagnosis system has boosted the demand for the market.

Key Market Trends

Smartphone Application Drive Growth of The Market

• The growing demand for real-time voice processing and image recognition is propelling the market for smartphone AI processors. Most AI processors include additional inbuilt neural processing units (NPUs) capable of parallel processing, low power consumption, and cognitive tasks. On-device AI employs dedicated AI chipsets and is expected to become prevalent in all flagship smartphones in 2022. Most new high-end smartphones include AI chips with a dedicated neural processing unit.
• AI is taking center stage in smartphones, and its applications extend far beyond digital assistants. With the advent of Edge-AI technology, many back-end profiling AI capabilities can now be moved to the phone itself. Artificial Intelligence (AI) and Machine Learning (ML) improve mobile phone hardware and software, with implications for marketers and consumers, and make life easier with each update.
• The virtual assistant features are steadily improving. Some speech recognition now provides a greater understanding than a human listener, even in crowded conditions. Over time, virtual assistants are likely to become a much more significant part of the user phone interface, and AI will identify the natural human language the user provides. In the coming years, smartphone manufacturers are expected to implement even more advanced AI and ML to identify people as their facial features change, such as growing a beard or wearing glasses.
• Moreover, the growing penetration of cell phones worldwide is also helping the market grow. For example, the mobile penetration in North America had 321 million unique mobile subscribers. By 2025, the penetration rate will increase by 2% to 345 million individual mobile subscribers.
• Additionally, a growing number of acquisitions and partnerships among tech giants contributed to the market growth. Apple is the leading buyer of companies in the global artificial intelligence space. For Instance, Apple acquired the highest number of AI companies, defeating Accenture, Google, Microsoft, and Facebook. All of the other companies also had an increased number of AI acquisitions.

North America to Occupy the Largest Market Share

• The North American region is expected to account for a significant share in the market in terms of demand, as it provides a suitable environment for startups and SMEs regarding government regulations and compliance. Also, due to various developments made by these companies, the region is expected to lead in technology adoption and major AI solution providers for mobile applications based in North America, hence driving the market to grow significantly in the forecast period.
• To generate technological breakthroughs in AI, the United States has decided to promote federal investment in AI R&D in collaboration with industry, academia, international partners and allies, and other non-federal entities. The former President of the United States, Donald Trump, proposed a two-year doubling of non-defense AI R&D in his fiscal year (FY) 2021 budget proposal. The Administration updated its AI R&D strategic plan, released the first progress report describing the impact of federal R&D investments, and published the first-ever reporting of non-defense AI R&D spending across the federal government.
• AI is built into Google's core. The company successfully transitioned from a mobile-first to an AI-first world. AI is integrated into all Google apps we use daily, including Google search engines, Google Maps, Google Photos, YouTube, and Gmail Smart Reply. Google is driving AI through its technological offerings, such as TensorFlow and Cloud AutoML (to name a few), assisting developers and SMBs in innovating through open-source projects.
• Additionally, a growing number of acquisitions and partnerships among tech giants contributed to the market growth. Apple is the leading buyer of companies in the global artificial intelligence space. For Instance, Apple acquired the highest number of AI companies, defeating Accenture, Google, Microsoft, and Facebook. All of the other companies also had an increased number of AI acquisitions.
• The market's growth in North America is attributed to evolving digital infrastructure in healthcare, a well-established healthcare sector, and rising patient awareness regarding the benefits of artificial intelligence. The demand for artificial intelligence in healthcare in the North American region will likely spur various key players in the market.

Competitive Landscape

The mobile artificial intelligence (AI) market is highly fragmented due to the presence of maximum players in most regions across the globe. Artificial intelligence consists of complex algorithms, which are increasing rapidly in the current market. Nowadays, several industries adopt Artificial Intelligence- algorithms that are easy to access complex systems, giving a high rivalry in the market. Key players are Intel Corporation, Microsoft Corporation, Alphabet Inc. (Google LLC), etc.

• October 2021 - Microsoft launched Microsoft AI Innovate, a program for nurturing and scaling start-ups leveraging Artificial Intelligence (AI). Microsoft AI Innovate is a 10-week initiative that will support start-ups in India leveraging AI technologies, helping them scale operations, drive innovation, and build industry expertise.
• September 2021 - Honor and Microsoft announced an expansion of an ongoing partnership between the two companies, under which they will collaborate on Microsoft cloud adoption, personal and mobile computing, as well as other technologies. As per the partnership, Honor will adopt AI speech and AI translation services based on Microsoft Azure. These services support Honor's Smart Assistant YOYO, collaborative office, smart travel, life services, smart translation, and other applications.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support