Xiaomi is gearing up to introduce generative AI applications on its smartphones in India by the end of the current fiscal year, according to industry insiders. This move aims to democratize advanced AI features, which have traditionally been exclusive to high-end devices, and could initially roll out on Xiaomi’s upper-mid-range smartphones priced around ₹40,000.
Following the recent global launch of the Xiaomi 14T in Europe—equipped with Google’s Gemini suite of generative AI features—this initiative positions Xiaomi alongside major players like Apple, Oppo, Samsung, and Google. The Xiaomi 14T comes packed with cutting-edge tools, including Google’s innovative “Circle to Search” and an AI-powered photo editor, which have become staples in premium smartphone lines.
Why Now?
The timeline for this rollout is yet to be confirmed, but sources suggest that it could coincide with next year’s Mobile World Congress in Barcelona. The urgency of this launch appears to stem from market competition; Xiaomi, which held the title of India’s leading smartphone brand for five consecutive years, recognizes the need to stay ahead in the rapidly evolving tech landscape.
“Generative AI still lacks a compelling hook that persuades users to pay extra for it,” noted a senior industry consultant. “However, Xiaomi can’t afford to lag behind, especially with competitors like Oppo aggressively introducing similar features across their entire lineup.”
Xiaomi’s Market Position
As of June 2024, Xiaomi maintained its position as the second-largest smartphone brand in India, capturing over 4.7 million units sold, which accounts for 13.5% of the market. Given this substantial market share, Xiaomi’s introduction of generative AI features is anticipated to influence how other brands approach AI technology.
The company plans to amplify its marketing efforts for these new features to gauge consumer interest and willingness to pay for AI enhancements. Historically, Xiaomi has integrated AI into its marketing strategies, particularly in camera technology and overall software functionalities. However, the true impact of generative AI on user experience remains to be seen.
Entry Price for AI
Currently, the entry price for smartphones equipped with generative AI features is approximately $850 (₹70,000). In a strategic response, Oppo announced it would launch over 100 generative AI features across a range of devices by the end of this year, potentially lowering the barrier to entry for consumers.
Market analysts highlight the challenge smartphone makers face in justifying the premium associated with generative AI features. A shift in market strategy may be on the horizon, where basic generative AI capabilities become standard across various price points, while advanced features could adopt a ‘freemium’ model, allowing consumers to pay for enhanced functionalities.
Navkendar Singh, associate vice-president at IDC India, commented, “Generative AI is not yet a decisive factor for smartphone buyers. However, basic AI features may become integrated into smartphones, creating a more seamless user experience. Advanced capabilities could require additional fees, either through ads or subscriptions, to offset the costs incurred by companies.”
As Xiaomi prepares to embark on this new venture, the smartphone industry watches closely to see how these innovations will reshape consumer expectations and market dynamics. With a strong focus on making generative AI accessible, Xiaomi aims to redefine the landscape of smartphone technology in India.
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