Xiaomi, the smartphone giant, is gearing up to introduce generative AI user applications to its smartphones in India by the end of the current fiscal year. This move will likely begin with Xiaomi’s upper-mid range smartphones, priced around ₹40,000, making generative AI features more accessible to a wider audience. Previously, these features were primarily reserved for premium smartphones.
This development follows the recent launch of the Xiaomi 14T smartphone in Europe. The flagship-grade device features Google’s Gemini suite of generative AI capabilities, including ‘Circle to Search’ and an AI photo editor, mirroring features found on Google’s own Pixel smartphones. This launch aligns Xiaomi with other smartphone brands like Apple, Oppo, Samsung, and Google in terms of incorporating generative AI features.
While a specific timeline for the Indian rollout is unclear, industry sources suggest that generative AI features could be integrated across Xiaomi’s smartphone lineup by the time of next year’s Mobile World Congress event in Barcelona.
One industry consultant highlighted that while generative AI hasn’t yet reached a point where users are willing to pay a premium for it, Xiaomi, a dominant player in the Indian smartphone market, can’t afford to fall behind. The company’s decision to introduce these features may have been accelerated by Oppo’s announcement of adding generative AI features to all its smartphones.
Xiaomi’s move is particularly significant considering its market dominance in India. As of the June quarter this year, Xiaomi held the second spot in the Indian smartphone market, with a share of over 13.5%, representing over 4.7 million smartphones sold. The company had topped the market for five consecutive years between 2018 and 2022.
The impending rollout of generative AI features by Xiaomi has the potential to influence other brands’ strategies in this domain. Another industry consultant expects Xiaomi to ramp up its marketing efforts for these features, gauging user willingness to pay for AI as a key feature.
The consultant further pointed out that Xiaomi has been utilizing AI in its smartphones for a while, particularly in areas like camera and overall software functionalities. However, it remains to be seen whether generative AI will truly make a significant difference in the smartphone landscape. Given the current widespread adoption of generative AI, Xiaomi is likely to eventually integrate these features into its phones, with the most effective approach being to offer them at lower price points.
At present, the entry point for generative AI in smartphones is relatively high, averaging around ₹70,000. Oppo, however, announced in July its plan to introduce over 100 generative AI features across its entire smartphone portfolio by the year’s end. This strategy of offering these features at various price points could prove effective in making generative AI a valuable proposition for consumers.
Recently, Mint reported that smartphone manufacturers are struggling to convince consumers of the value of paying a premium for generative AI features. This could lead to a shift in market strategy, with basic generative AI features becoming standard across all price ranges, while more advanced features, such as the ability to erase or add objects in photos, adopt a ‘freemium’ model.
Navkendar Singh, Associate Vice-President at IDC India, commented that generative AI, in the long run, may become an integral part of the smartphone interface, enhancing the overall user experience. He believes that advanced features will likely require users to pay, either through ad-supported models or direct subscriptions, enabling companies to recover some of the costs associated with partnerships and engineering.
The introduction of generative AI features by Xiaomi in India holds significant implications for the smartphone industry. It signifies a potential shift towards making these features more accessible to a wider audience, paving the way for a more innovative and AI-driven future for smartphones.
