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Most marketing leaders would agree that driving growth is a critical aspect of their role. But when met with day-to-day realities, growth often takes a back seat. Marketers have to juggle limited budgets, competing demands, and the pressure to show quick wins. This results in marketing efforts that focus on what feels urgent and out of line with what leadership expects.

Forty-one percent of midmarket CMOs say that developing a strategy for new customer acquisition is their CEO’s top expectation over the next 12-18 months. This is according to IDC’s 2025 Global Midmarket Tech CMO Priorities Survey.

Yet many marketing teams remain focused on other outcomes. In fact, 30% say their top priority is increasing revenue from existing customers. Another 29% are focused on reducing costs and streamlining operations.

This isn’t a sign that marketing is off course. It’s a sign that the course itself is more complex. But when executive expectations point one way and internal execution points another, the disconnect can undermine momentum. This is the second of four major disconnects facing marketing teams, as identified by IDC. If left unaddressed, it limits marketing’s ability to deliver measurable business impact at the time it matters most.

nd the first step to achieving true AI-driven growth is breaking through the illusion.

Want the full picture? Download IDC’s Executive Insights Brief: The four disconnects shaping marketing in 2025 to get the four data-backed recommendations and realign your team’s priorities with executive growth goals.

How marketing lost sight of growth

In many ways, this disconnect was inevitable. Over the past few years, CMOs have had to adapt quickly — grappling with new technologies, shifting buyer behavior, and intensifying pressure to do more with less. Along the way, the role itself has fundamentally changed.

Just a few years ago, IDC’s survey data confirmed that most midmarket CMOs didn’t see that change coming. In 2021, 49% of CMOs said they expected no change in their role over the next two years, and only 15% predicted an evolution toward becoming a Chief Market Officer — a title that signals broader responsibility for revenue growth and customer insight. Today, that view has shifted: 33% of CMOs now recognize their role has expanded to include a new title, greater responsibility for understanding the market, and increased accountability for both marketing and sales outcomes.

In short, marketing is no longer responsible solely for generating leads or building awareness. Executives now expect it to directly fuel business growth through acquisition, expansion, and orchestrated, insight-driven customer journeys that span the entire funnel.

Against that backdrop, it’s understandable why many CMOs have leaned into retention and efficiency. In a time of rapid change, focusing on what already works can feel like the safest choice. But when the rest of the business pivots toward bold growth, those instincts can become misaligned. Efforts to protect what’s already working may unintentionally push growth initiatives to the sidelines.

The risks of misalignment

When executive expectations lean into growth while marketing remains focused on retention and efficiency, frustration builds. From the CEO’s perspective, marketing appears out of step. Results are being delivered, just not the ones the business is counting on.

At first, this disconnect can be hard to spot. A strong retention strategy can keep revenue steady in the short term, creating the impression that everything is on track, even as new customer growth begins to stall. Over time, however, the lack of a replenished pipeline becomes impossible to ignore.

The consequences compound quickly:

Revenue projections slip as acquisition lags.
Cross-functional trust erodes.
Strategic credibility suffers.

If this sounds familiar, you’re not alone. Many teams face challenges moving beyond their traditional role at the top of the funnel. Nearly 35% of midmarket CMOs say demonstrating marketing’s strategic impact and ROI beyond lead generation is the top credibility challenge their teams face, according to IDC’s research. Another 25% report difficulty reinforcing marketing’s leadership role in driving business growth across the organization.

Additionally, challenges in measurement deepen the disconnect. While the C-suite continues to prioritize outcome-based KPIs, midmarket CMOs report that these metrics remain the hardest to define and track. Without a clear way to measure and communicate progress toward growth, internal alignment stalls, and confidence from leadership wanes.

Meanwhile, competitors that invest in acquisition today are building relationships that may be difficult to disrupt later. And when pressure to deliver spikes during budget season, board reviews, or sudden pivots in business direction, marketing teams are left scrambling to respond, without the infrastructure or momentum to do so effectively.

This mirrors another key disconnect IDC identified for 2025: the “illusion of AI adoption.” In both cases, surface-level activity is mistaken for strategic progress. A well-run retention strategy may look like success until growth becomes the mandate, and marketing finds itself unprepared to scale.

The takeaway? Misalignment introduces real risk: missed targets, siloed execution, and reactive strategy. Without a deliberate shift in focus and accountability, marketing can end up sidelined from the very decisions it’s expected to help lead.

Recognizing the need for rebalance

This isn’t about choosing between growth, efficiency, or retention. The most effective marketing strategies in 2025 will do it all. But to meet rising expectations from the C-suite, CMOs must rebalance attention, resources, and measurement frameworks toward initiatives that drive net-new business.

That starts with acknowledging the gap:

Are your current campaigns designed to reach new audiences?
Are acquisition metrics part of your performance benchmarks?
Is your team resourced and empowered to prioritize growth?

For many, the honest answer is “not yet.” But that’s not a failure. It’s a starting point. And it signals that now is the time to course correct. The sooner CMOs confront this disconnect, the better positioned they’ll be to respond before it widens.

Realigning for growth

Recognizing the gap is one thing. Closing it takes action.

Retention and efficiency will always matter, but acquisition needs to have a clear place in the strategic plan, with dedicated resources, defined metrics, and visibility across the organization. For many teams, that requires a shift in how priorities are set and how success is measured.

IDC’s Executive Insights Brief: The four disconnects shaping marketing in 2025 outlines specific actions that can help marketing leaders move toward better alignment with growth expectations. These are practical, manageable steps designed to show momentum now and build strategic strength over time.

Ready to bridge the gap between marketing and executive growth goals?
Get the four actionable steps to realign your strategy and strengthen your acquisition efforts today.

In a world increasingly driven by sustainability and cost-efficiency, the used device market is no longer a secondary consideration; it’s a strategic frontier. From smartphones and laptops to wearables and tablets, pre-owned tech is gaining traction across consumer and enterprise segments alike. At IDC, we’ve been closely monitoring this evolution through our Quarterly Used Device Tracker, uncovering the key trends that reveal how the market is maturing, diversifying, and reshaping the broader device ecosystem.

IDC’s recent forecast indicates that global shipments of used smartphones alone will grow by 3.2% year-over-year in 2025, whilst the worldwide market for new smartphones is only projected to grow 1% over the same period. This is fueled by widespread trade-in programs, improvements in refurbished device quality, and rising environmental awareness. As affordability meets reliability, the appeal of second-hand devices is expanding beyond budget-conscious consumers to mainstream buyers and businesses.

Used vs. new smartphone shipments: A diverging growth story

The smartphone market is undergoing a notable shift, with sales of new devices having declined in both 2022 and 2023, before seeing a modest recovery in 2024. In contrast, the used smartphone market has been constantly growing.

This divergence reflects changing consumer priorities: affordability, sustainability, and the growing trust in refurbished devices. As shown in the graphs below, the used device segment is not just resilient, it’s becoming a growth engine in its own right.

What’s fueling the shift

The slowdown in new smartphone shipments stems largely from economic caution and longer device lifespans. With inflation squeezing budgets and phones lasting longer thanks to improved hardware and software support, consumers are holding onto their devices for extended periods. Add to that a lack of groundbreaking innovation and saturation in mature markets, and it’s clear why growth has stalled.

Meanwhile, the used smartphone market is thriving. Buyers are drawn to the value and reliability of refurbished devices, especially as trade-in programs expand and certification standards improve. Sustainability is also playing a bigger role; choosing a used device is increasingly seen as a wise, eco-conscious decision. As consumers become more environmentally conscious, buying second-hand devices helps reduce electronic waste and makes more efficient use of resources. Additionally, the rapid pace of technological advancement means that even older models can still perform well and meet everyday needs. Consequently, the market for second-hand smartphones is thriving, often outpacing sales of brand-new devices.

Forecasting the future

As the smartphone market looks ahead to the second half of the decade, the growth dynamics between new and used devices are expected to shift. According to IDC’s forecast, new smartphone shipments will gradually recover, with growth rates climbing from 1% in 2025 to 1.4% by 2029. This rebound reflects improving macroeconomic conditions, renewed upgrade cycles, and innovation in areas like AI and foldable devices.

However, the used smartphone market will continue to grow at a faster pace, albeit with a gradual deceleration. Starting at 5.8% in 2026, growth is projected to ease to 4.9% by 2029 as the market matures and supply chains stabilize. The sustained momentum in the used segment underscores its role as a mainstream choice, driven by affordability, sustainability, and the continued expansion of trade-in and refurbishment programs.

The graph below illustrates this, highlighting how both segments are growing, but with used smartphones maintaining a clear lead.

Looking ahead

As the smartphone market evolves, the used device segment is redefining value, sustainability, and accessibility. With strong growth expected to continue through 2029, it’s evident that second-hand smartphones have moved beyond being a niche market; they are now a strategic pillar of the industry. Whether you are an original equipment manufacturer (OEM), a retailer, or an enterprise buyer, understanding this shift is crucial for staying competitive in an increasingly circular, data-driven, and consumer-focused market.

On the surface, AI seems woven into modern marketing. Pilot programs are evolving into real workflows. AI tools are being deployed for a variety of tasks. Teams are becoming more fluent in GenAI, automation, and orchestration.

But underneath it all, the foundation is often still rocky. Insufficient infrastructure, skill shortages, and a lack of clear governance reveal a distinct disconnect: many organizations are mistaking adoption for advancement, and it’s creating a false sense of AI maturity.

In fact, just over half of midmarket CMOs have implemented AI or GenAI into their marketing strategy, according to IDC’s 2025 Global Midmarket Tech CMO Priorities Survey. Yet only 26% are seeing improved efficiency, creativity, and effectiveness as a result.

This gap between confidence and capability defines what IDC calls the illusion of AI adoption.

At the same time, CMOs face mounting pressure to deliver more, faster. From bold innovation and customer acquisition to measurable ROI and alignment with enterprise tech infrastructure, today’s marketing leaders are navigating what IDC refers to as the Pressure Cascade: a compounding set of executive expectations with limited room for missteps.

This illusion of AI adoption is just one of four key disconnects reshaping marketing in 2025. And the first step to achieving true AI-driven growth is breaking through the illusion.

Download IDC’s Executive Insights Brief: The four disconnects shaping Marketing in 2025 and get three proven strategies to cut through the illusion of AI readiness and realign your AI ambitions with operational reality. Plus, uncover more insights into the AI challenges facing CMOs today.

The mirage of AI maturity

Momentum can create the illusion maturity. The presence of AI tools, active experimentation, and a handful of successful use cases can have organizations thinking they’ve successfully transformed into optimized, AI-infused operations.

But the reality is that most transformations are still in the early stages.

According to IDC’s MaturityScape: AI-Fueled Organization 1.0, a majority of midmarket businesses are undergoing an opportunistic pivot to AI while working to formalize strategy, establish oversight, and integrate practices across teams.

The problem isn’t that these companies are doing the wrong things. It’s that they’re doing the right things in isolation.

Experimentation remains siloed. Cross-functional learning is limited. AI efforts may be structured, but they’re not yet orchestrated or repeatable.

This pivot phase can generate positive signals such as early productivity gains, promising pilot outcomes, and internal excitement. But those signals can also be misleading. Without a strong foundation in place, organizations can’t move from experimentation to scale.

What emerges is a semblance of progress: a hodgepodge of capabilities that looks advanced but doesn’t have the basis to deliver long-term value.

Understanding where your organization stands on the AI maturity journey is a critical step toward ensuring your efforts in AI aren’t just active, they’re effective. And without that clarity, it’s easy to mistake movement for mastery.

The AI readiness gap: Perception vs. preparedness

While many marketing leaders are confident in their organization’s AI trajectory, IDC’s research reveals a different picture. On paper, AI adoption appears to be surging. However, operationally, most organizations are still grappling with fundamental gaps that limit impact and scalability.

For example, 37% of midmarket CMOs believe AI-enabled marketing technologies have potential to help their organizations over the next 12-18 months, according to the Midmarket survey. This includes incorporating tools and workflows to boost content creation and automate campaigns, critical elements of modern marketing success.

Still, only 31% of the same CMOs are prioritizing the modernization of their MarTech stacks. This is a crucial metric. Without updated systems and integrated data pipelines, even the most sophisticated AI tools remain disconnected from broader workflows, limiting their value.

What emerges is a widening gap between perception and preparedness.

Leaders may feel confident in their AI capabilities, but confidence alone doesn’t modernize platforms, upskill teams, or align cross-functional strategy. Without a clear-eyed look at operational readiness, organizations risk mistaking AI activity for AI advantage. And in doing so, they leave substantial business value untapped.

The blind spots hiding true transformation

The illusion of AI readiness isn’t just about overconfidence: It’s about overlooked fundamentals. Lurking beneath the surface of many marketing organizations are three persistent blind spots that impede progress, even as AI use proliferates.

Unsustainable infrastructure: Legacy systems and siloed data remain some of the biggest barriers to AI effectiveness, yet few CMOs report modernizing their tech as a top priority. Too often, marketers layer new AI solutions onto outdated architectures, expecting transformation from tools that lack full integration with customer and operational data.
Untapped talent: AI adoption isn’t just a technology challenge. It’s a people challenge. Marketing teams need fluency in how AI works, where it adds value, and how to measure and report ROI. Still, many teams lack the training or hiring support to confidently engage with AI tools. The result is inconsistent usage, limited experimentation, and stalled progress.
Undefined governance: Perhaps the most insidious blind spot is the absence of a centralized AI strategy. In many organizations, no single leader owns AI enablement. Without clear accountability and guidance, AI initiatives tend to remain ad hoc, driven by interest or urgency rather than overarching business priorities. This leads to duplication, wasted investment, and difficulty measuring success.

Together, these blind spots don’t just delay AI maturity, they hide its true nature. Organizations may appear active in their use of AI, but without addressing these core areas, their progress remains tenuous at best. The longer these issues go unaddressed, the harder it becomes to scale success, drive innovation, or justify further investment.

Now is the time to break the illusion of AI adoption

AI is no longer optional. It’s a modern-day must. Customers anticipate personalization in real time. Executives expect measurable ROI and aggressive acquisition strategies. And the organizations that have made meaningful investments into foundational AI readiness are beginning to pull ahead.

For CMOs still operating under the illusion of AI capability, it’s time to wipe the fog from the mirror. The gap between perception and reality isn’t just a strategic misalignment – it’s a missed opportunity to gain a competitive advantage.

Without a concentrated effort to strengthen technological infrastructure, elevate team capabilities, and establish clear ownership, AI initiatives risk becoming isolated experiments rather than engines for long-term growth.

Forty-two percent of organizations plan to increase their IT spending in 2025 to support greater AI use, found IDC’s Future Enterprise Resiliency and Spending Survey Wave 11. But that investment won’t pay off without alignment across strategy, systems, and people. The marketing leaders who take ownership of that alignment now will be best positioned to turn AI ambition into operational impact.

The illusion of AI adoption won’t be broken with more tools or individual use cases. It requires a shift in mindset: from confidence to clarity, from activity to orchestration, and from experimentation to strategic enablement.

To go deeper on how to turn illusion into reality – and ensure your AI strategy delivers real results.

The role of the Chief Marketing Officer (CMO) is evolving rapidly, driven largely by the transformative power of artificial intelligence (AI). As technology reshapes marketing operations and customer engagement strategies, CMOs are being called upon to redefine their approach and step into new strategic roles.

The New Accountability of CMOs

Today, CMOs find themselves with expanded responsibilities beyond traditional marketing. IDC’s recent webinar, “AI, Strategy and the new CMO Mandate,” Laurie Buczek and MaryAnn Holder-Browne highlighted that an astonishing 81% of marketing leaders are now directly accountable for the digital customer experience, with 84% facing increased accountability for corporate communications. This places CMOs at the forefront of shaping organizational perception and customer relationships, using data-driven insights and AI-driven technologies.

Leading the Charge in AI Governance

AI’s rapid integration into business operations necessitates careful oversight and strategic governance. CMOs are uniquely positioned to lead this charge due to their deep understanding of customer data and interactions. This governance role ensures that AI adoption not only drives efficiency and innovation but also maintains digital trust and compliance.

Integrating Sales as a Strategic Marketing Channel

The integration of sales and marketing functions represents a critical evolution in the role of today’s CMO. As highlighted in a recent discussion, there’s a clear shift towards viewing sales not as a standalone department, but as a strategic channel integrated within the customer’s journey. CMOs, transitioning into roles akin to Chief Commercial Officers, are now tasked with orchestrating unified, seamless customer experiences. This blending of marketing strategy and sales execution is advantageous, and it’s increasingly essential for driving deeper customer engagement and sustained business growth.

Driving Growth Through Cross-Functional Integration

The distinction between sales and marketing is diminishing, with CMOs increasingly assuming responsibility for seamless customer journeys. This shift is transforming the CMO’s role into that of a Chief Commercial Officer, blending sales tactics and marketing strategies to foster cohesive customer experiences and drive measurable business growth.

Practical Strategies for CMOs in the AI Era

Given these new expectations, how can CMOs strategically navigate the AI landscape?

Customer Acquisition and Experience: Prioritize AI tools that deliver personalized customer experiences and streamline acquisition processes, ensuring alignment with the company’s growth goals.
Tech Stack Modernization: Lead strategic partnerships with IT departments to modernize the technology stack, focusing on tools that integrate AI capabilities effectively.
Cross-Functional Integration: Foster collaboration across marketing, sales, and data teams to build a unified approach, driving consistency in customer messaging and experience.

Want more CMO-focused resources to help you capitalize on the AI technology shift? Visit our resource page to help you recalibrate your GTM strategy.

CMOs in the Age of AI: Adapting to New Mandates

The mandate for CMOs has evolved. As AI reshapes industries, marketing leaders who adapt quickly and strategically will position their organizations to excel in customer engagement, operational efficiency, and market leadership. The future of marketing leadership belongs to those who can effectively navigate this new landscape, leveraging AI to create authentic and impactful customer experiences.

Watch the full webinar replay to learn more about how marketing leadership is reshaping in response to technological advances and customer expectations.

The smartphone industry finds itself at a crossroads, grappling with market maturity and the challenges of sustaining growth. Once a hotbed of rapid innovation, the sector now faces stagnation as global giants dominate the vendor space, governments adopt protectionist policies, and profitability dwindles. Channels, too, are struggling with reduced incentives, leaving them less motivated to push new devices.

In this environment, the search for breakthrough technology has become more urgent than ever. Vendors are desperate for an innovation that can reignite consumer interest and drive large-scale replacements of increasingly durable smartphones. The stakes are high: without a compelling reason for consumers to upgrade, the industry risks losing momentum entirely.

The quest for the “next big thing” has led to bold bets on technologies like 5G, foldable displays, and AI integration. Yet, each of these innovations has faced its own set of hurdles, from high costs and limited use cases to consumer skepticism and slow adoption rates. The industry’s challenge is clear—find a game-changing technology that not only captures the imagination of consumers but also delivers tangible value. The question remains: which innovation will rise to the occasion?

5G Transition: Why It Fell Short of Expectations

The transition to 5G was heralded as a transformative leap for the smartphone industry, yet its impact on sales and consumer behavior has been underwhelming. Several factors contributed to this shortfall, revealing critical gaps in execution and market readiness.

Consumer Awareness and Use Case Gaps: For the average consumer, 4G already meets most connectivity needs, from social media browsing to video streaming. The incremental speed improvements offered by 5G failed to resonate as a compelling reason to upgrade. Moreover, the lack of well-defined use cases—beyond faster downloads—left consumers questioning the necessity of 5G-enabled devices. Compelling use cases never hit the mass market fast enough—“stream a video a bit faster” failed to sell phones.

Operator Investment and Commercialization Challenges: Telecom operators faced significant hurdles in rolling out and commercializing 5G networks. Many were still grappling with the financial burden of 4G investments, which had not fully delivered expected returns. The economic downturn and market maturity further strained their ability to invest in 5G infrastructure. As a result, network availability remained fragmented, delaying the further commercialization of 5G packages and limiting consumer adoption.

Limited Product Differentiation: Unlike the leap from 2G to 3G/4G, which introduced smartphones as a new product category, the shift from 4G to 5G did not redefine the device experience. Vendors struggled to position 5G as a must-have feature, as the technology did not fundamentally alter how consumers interact with their phones.

External Disruption: The global COVID-19 pandemic and accompanying economic volatility slowed the pace of 5G adoption. Consumers prioritized essential spending, while vendors and operators faced logistical and financial challenges in scaling 5G deployments.

In summary, the 5G transition fell short due to fragmented operator investments, limited consumer awareness, and a lack of compelling use cases. While the technology holds promise, its immediate impact on smartphone innovation remains muted.

5G is a foundational capability that will matter for years, but as a buying trigger it became a point of parity. It is table stakes rather than a reason to replace a still‑reliable phone.

Foldables: Dazzling Displays, Constrained Adoption

Foldable displays were heralded as the next frontier in smartphone innovation, promising larger screens in compact forms. Over the past decade, displays grew until ~6.5–7 inches became the sweet spot.

Foldables promised the next leap: tablet‑like canvas in a pocketable device. Market leaders like Samsung and Huawei have pushed the boundaries with devices like the Galaxy Fold series and Mate XT, while others, such as Lenovo and TCL, have showcased futuristic concepts like rollable and bendable displays. Despite these advancements, foldables have struggled to gain widespread adoption and remain a premium niche for several reasons:

Price Ceilings: Foldable smartphones remain firmly in the premium segment, with an average price of $1,188 in 2025, nearly three times the cost of non-foldable devices. This pricing barrier limits accessibility and slows penetration, especially when Apple dominates the high-end market with a 74.2% share in the ultra-premium segment. In the $1000+ band, Apple dominates mindshare and market share; premium buyers often stay with the iPhone even over novel Android form factors.

Durability Perception: Durability concerns also weigh heavily on consumer sentiment. Early foldable models were criticized for their thickness, weight, and fragility, leading many to view the technology as experimental. While these issues have improved, skepticism persists, with many consumers waiting for the technology to mature further.

Practicality Trade-offs: Early‑gen thickness and weight—plus crease visibility—reduced pocket comfort and everyday appeal.

Perception challenge: Despite their innovative form factor, they have yet to deliver compelling use cases that justify their high price tags. For most users, the benefits of a larger screen do not outweigh the costs and uncertainties.

Even with meaningful engineering progress and real benefits for reading, multitasking, and content creation, foldables account for a small fraction of shipments. As of 2025, foldables account for just 1.6% of global smartphone shipments, a figure projected to rise only marginally to 2.0% by 2029. While the technology holds promise, its slow adoption underscores the challenges of balancing innovation with consumer needs and market realities. They inspire excitement but not yet mass‑market renewal.

AI Integration: The Emerging Game-Changer for Smartphones

The smartphone industry is witnessing a paradigm shift with the integration of AI, positioning chipsets as the cornerstone of innovation. With large models moving from cloud‑only to hybrid and on‑device execution, chip capability—especially NPUs delivering tens of TOPS—has become a differentiator consumers can feel: faster photo/video edits, instant transcription and translation, enhanced voice assistants, and privacy‑first features that work offline. Unlike foldable displays, which primarily target premium users, AI-powered smartphones promise to revolutionize the entire ecosystem—albeit with hurdles to overcome.

Chipset Capabilities: The Foundation of AI Smartphones

AI integration in smartphones hinges on advanced chipsets equipped with neural processing units (NPUs) capable of handling Generative AI models. Devices like the iPhone 16 Pro (Apple A18 Pro) and Galaxy S25 Ultra (Snapdragon 8 Gen 4) showcase the cutting-edge capabilities of these processors.

Flagship SoCs leading the charge today include, but are not limited to:

Apple A18 Pro – iPhone 16 Pro and 16 Pro Max
Qualcomm Snapdragon 8 Gen 4 – Samsung Galaxy s25 series, Xiaomi 15/15 Ultra
MediaTek Dimensity 9400 – Vivo X200 , Oppo Find X8
Samsung Exynos 2500 – Galaxy Z Flip 7
Google Tensor G5 – Pixel 10 series
Huawei Kirin 9020 – Pura 80 series

However, these chipsets are currently exclusive to premium models, limiting accessibility for the broader consumer base. This exclusivity creates a bottleneck for mass adoption, as the high cost of AI-ready devices keeps them out of reach for most users.

What’s Holding AI Back (For Now)

Premium Segment Focus: The initial rollout of AI smartphones in the premium segment is both a strategic advantage and a challenge. While it allows vendors to showcase the technology’s potential, it alienates the majority of consumers who are satisfied with their current devices. Without compelling use cases that resonate with everyday needs, the urgency to upgrade remains low. This dynamic mirrors the struggles faced by foldable displays, where high pricing and niche appeal slowed adoption.

Consumer Confusion: One of the most significant barriers to AI smartphone adoption is consumer (and even frontline sales staff) confusion. Many users struggle to understand what AI integration truly means—Is it just ChatGPT? Does it require subscriptions? How does it enhance daily tasks? This lack of clarity extends to vendors, who are still refining their messaging and use-case demonstrations. Until the industry can demystify AI and articulate its tangible benefits, widespread adoption will remain elusive.

Despite these hurdles, AI checks more boxes than foldables as a mass catalyst: it improves daily tasks, scales through software updates, and benefits from ecosystem flywheels across Android and iOS. As models get more efficient and mid‑range silicon catches up, AI features will trickle down and create new reasons to upgrade.

On the vendor side, vendors are shifting launch narratives from spec sheets to demonstrations of real‑world AI tasks: face‑aware retouching that respects skin tone, background clean‑up with content‑aware fill, audio cleanup during calls, meeting‑notes with speaker attribution, and semantic search across photos and files.

In summary, despite the challenges, AI holds unparalleled promise to reshape the smartphone landscape. With devices already boasting laptop-level processing power, the groundwork for AI-driven innovation is solid. As vendors shift their focus from technical specifications to real-world applications, and as software solutions extend AI capabilities to mid-range devices, the network effect will drive adoption. AI is not just a feature—it’s a transformative force that could redefine the smartphone industry in the years to come.

Chipsets vs. Displays: Why Silicon Likely Wins

Four dynamics tilt the scales toward chipsets and AI over display form factors:

Ubiquity of Benefit: AI touches photos, messages, calls, search, and work—not just screen real estate. That breadth matters.

Faster Iteration: Software features improve monthly; displays advance on annual hardware cycles.

Privacy and Latency: On‑device AI minimizes round‑trip to cloud and keeps sensitive content local.

Developer Leverage: common AI runtimes and SDKs let apps target large installed bases quickly, magnifying the impact of each chipset generation.

None of this diminishes the importance of display innovation—better outdoor visibility, PWM‑free dimming, efficient LTPO, and tougher glass all raise baseline quality. But if the goal is to unlock a broader replacement cycle, silicon‑enabled experiences are more likely to convert fence‑sitters than a novel hinge.

What This Means for OEMs, Carriers, and Channels

Lead with outcomes, not acronyms: demo a 30‑second AI workflow that saves a customer time or embarrassment; resist dense spec dumps.

Target mid‑range bridge SKUs: prioritize NPUs and memory configs that enable smaller on‑device models for key features (photo clean‑up, summarization).

Upskill sales teams: provide scripts and store demos to cut through AI jargon and show value quickly.

Respect repairability and longevity: AI features should run well for multiple OS cycles; communicate this to reduce upgrade anxiety.

Lessons Learned

Innovation must map to daily friction. If a feature doesn’t make photos, calls, or messaging better, it won’t move units.

Affordability gates adoption. The winner will be the first credible mid‑range AI experience, not the flashiest flagship demo.

Hardware–software co‑design beats specs‑for‑specs. NPUs, RAM, storage bandwidth, and model optimization have to be planned together.

Clarity creates confidence. Simple explanations (and in‑store demos) beat buzzwords for mainstream buyers.

Ecosystems compound advantage. Platform‑level AI frameworks and app integrations will outlast one‑off hardware tricks.