Samsung is Betting on AI to Expand Its Hardware Ecosystem and Drive Revenues

Samsung is betting on AI and new form factors to drive smartphone upgrades and expand its product ecosystem.

Galaxy AI push to incentivize upgrades: Samsung is leveraging its Galaxy AI suite of artificial intelligence features to motivate users to purchase new products, emphasizing the convenience and benefits these capabilities bring:

• The company recently launched the Z Fold6, Z Flip6, and its first smart ring, the Galaxy Ring, with AI as a key selling point.
• Samsung mobile head TM Roh believes Galaxy AI will become more pervasive in daily life over time, similar to the trajectory of smartphones and the internet.

Monetizing AI through software and services: As Samsung infuses its apps with AI, the company is exploring opportunities to generate revenue from software, potentially reducing reliance on hardware sales:

• Roh hinted at possible subscription models for AI services, but said Samsung is still evaluating options to make wise decisions for both consumers and its mobile business.
• The company plans to advance its native apps and software to make them more prominent as AI makes devices more intuitive, potentially reducing the need for traditional app stores.

Future products in foldables and mixed reality: Samsung is working on expanding its ecosystem with new form factors and device categories:

• Roh suggested Samsung could bring foldable screens to new product categories beyond smartphones when the hardware, software, and ecosystem reach full maturity.
• The company is developing a mixed reality platform, likely a software offering, to be announced within the year, though details on specific devices remain undisclosed.

Broader implications: Samsung’s AI-centric approach reflects the intensifying competition in the smartphone market, as rivals like Apple also introduce AI features. The South Korean giant’s exploration of new form factors and revenue streams underscores the evolving landscape, where innovation in both hardware and software is increasingly critical for differentiation and growth in the maturing industry.