Tech giants divide the future: Will AI gadgets replace smartphones? - ForkLog: cryptocurrencies, AI, singularity, future

# Tech giants divide the future: Will AI gadgets displace smartphones?

The race to shift the leadership position from smartphones to gadgets has already begun. Some companies are working on alternative devices with artificial intelligence, reports The Economist.

The Fight Against the Duopoly

Over the past two decades, the iPhone with iOS and Google with Android have become monopolists in user interaction with the digital world. Additionally, the corporation behind the most popular search engine pays large sums of money to “Cupertians” for its integration into smartphones.

In return, Apple chose Google’s AI solutions to improve Siri.

“After careful evaluation, we concluded that Google’s technology provides the most effective foundation for Apple Foundation Models. We are excited about the innovative possibilities it will open for our users,” — said the joint statement from the tech giants.

Neither had an incentive to change the established situation, unlike their competitors.

On January 19, OpenAI’s Director of Global Affairs, Kris LeHane, stated that the company “is on track” and will debut its first device in the second half of 2026.

Two days later, information emerged that Apple is working on a wearable gadget aimed at taking the initiative from OpenAI. Meta is developing AI-based smart glasses and shifting resources from VR headsets to this sector.

Amazon — the world’s largest online retailer — has implemented its own AI, Alexa+, in Echo speakers and will soon do the same with Echo glasses and headphones.

Market capitalization of Meta, Alphabet, Apple, and Amazon. Source: The Economist.## Price Growth

The next few years will be challenging for smartphones. Yan Van from the analytical company Counterpoint Research expects global shipments to decrease by about 6% in 2026, with no recovery in sight. Meanwhile, there was a 2% growth in 2025.

One of the reasons for the decline is the sharp increase in memory chips. This is related to the AI boom — investing billions of dollars in data centers has absorbed all supply.

According to Van, over the past 15 months, the cost of 12 GB of RAM has increased by $70. Cheap phone manufacturers will be forced to raise prices, negatively impacting sales volumes. But Apple, whose smartphones are sold with a good markup, will also feel margin pressure.

The Factory War

The situation is worsened by the so-called “factory war.” Smartphone manufacturers like Apple and Samsung have long been the largest buyers of semiconductors. But now, their positions are being overtaken by Nvidia and other AI chip developers. These are more valuable and profitable for manufacturers.

As their importance diminishes, phone makers will find it harder to secure the necessary chips.

Some have long been dissatisfied with the revenue-sharing system for smartphones. App developers pay Apple a commission of up to 30% on in-ecosystem purchases.

OpenAI, which earns most of its revenue from subscriptions, must transfer part of its income to Cupertino or Google.

Meta is looking for ways to reduce its dependence on the smartphone duopoly since Apple introduced a feature in 2021 that allows users to opt out of activity tracking. This made data collection more difficult and hurt the advertising business.

Additionally, there is a prospect of consumers switching to devices better suited to the business models of competitors like Apple and Google. Thanks to built-in lenses in Meta’s glasses, WhatsApp messages can be displayed. For the corporation, spending more time on its platforms means increased revenue from advertising.

Amazon also aims to place its Echo speakers in every home and glasses on every face. This will allow collecting more data for the growing advertising business and simplify shopping on its marketplace.

OpenAI will benefit if people abandon smartphones and rely on chatbots for digital interaction.

The Threat Is Murky

Currently, the threat to Apple and Google remains minor. There are a total of 15 million smart glasses users worldwide. Cupertino sold 250 million iPhones just last year. If the recent agreement with Alphabet makes Siri less irritating, it could encourage even more smartphone purchases.

At the same time, developers of alternative gadgets face difficulties. Google had to halt sales of its smart glasses because their built-in cameras violate people’s privacy.

There are also technical issues. The glasses need to be lightweight, leaving little room for batteries. Overheating and limited lifespan were among the reasons why Humane’s product, launched in November 2023, failed.

Alex Katuzyan from Qualcomm expects such “advanced” gadgets to be widely adopted, but only as supplementary tools.

Mark Zuckerberg previously confirmed this view: people who switch to smart glasses will not abandon smartphones. They will just look at them less often.

The appearance of phones with screens did not prevent consumers from buying computers, The Economist emphasized.

Apple and Google Are Evolving

The duopolists are also not standing still. Rumors suggest that Apple is working on its own smart glasses. Google launched Android XR — a platform for virtual reality headsets. The company also released a new version of its smart speaker based on Gemini.

Recall that Apple plans to launch its own AI-based web search. It will be integrated into the Siri voice assistant.