TLDR: Gartner forecasts that global end-user spending on generative AI (GenAI) smartphones will reach $298.2 billion by the end of 2025, representing 20% of the total AI end-user spending. This surge is attributed to the increasing integration of on-device GenAI models and Neural Processing Units (NPUs) across both premium and basic smartphone segments.
According to a recent report by Gartner, worldwide end-user spending on generative AI (GenAI) smartphones is projected to hit an impressive $298.2 billion by the close of 2025. This significant figure is expected to account for 20% of the total AI end-user spending for the year.
Gartner defines GenAI smartphones as devices equipped with a built-in neural engine or neural processing unit (NPU) capable of running small language models. The forecast encompasses both premium smartphones and basic smartphones (those priced under $350), while excluding utility smartphones, which are not expected to feature NPU capabilities in the foreseeable future.
The growth in this sector is primarily driven by mobile vendors’ increasing efforts to integrate on-device GenAI models and applications. This trend is anticipated to propel end-user spending on GenAI smartphones to $393.3 billion in 2026, marking a substantial 32% increase from the 2025 projections.
Looking further ahead, Gartner predicts a complete saturation of GenAI capabilities in the premium smartphone market, with 100% of such devices expected to feature these capabilities by 2029. In 2025, nearly all premium GenAI smartphones are forecasted to include NPUs, while 41% of basic GenAI smartphones will also incorporate these specialized processing units. By 2027, Gartner expects on-device NPUs to achieve performance levels exceeding 40 tera operations per second (TOPS), becoming the standard in premium GenAI smartphones. This advanced performance will facilitate the real-time execution of complex multimodal AI workloads without excessive power consumption.
Also Read:
- Generative AI Reshapes Content Creation: Opportunities, Challenges, and Market Growth in 2025
- Australia’s IT Spending to Hit A$172.3 Billion by 2026, Fueled by Broad AI Investments
Ranjit Atwal, Senior Director Analyst at Gartner, commented on the evolving user interaction with AI: “Currently, most users still rely on text or touch for all tasks, and voice interactions remain limited in scope. However, as conversational AI becomes more natural in the future, users are expected to become more comfortable with AI as a proactive digital companion, rather than just a reactive tool.” Atwal further emphasized the hardware requirements for optimal AI experiences, stating, “The broad use of new NPUs in smartphones will allow GenAI models to run faster and more efficiently, requiring users to upgrade to the latest smartphone hardware for optimized experiences.”
