LONDON, Jan 26, 2026, 11:58 GMT
- The Economist said the Apple-Android smartphone duopoly is facing fresh pressure from AI-first devices backed by OpenAI, Meta and Amazon.
- Counterpoint’s Yang Wang expects global smartphone shipments to fall about 6% this year, citing rising component costs and tougher competition for chip production.
- Analysts and writers say phone AI chips are powerful but still hard for outside developers to tap, limiting everyday “on-device” AI features.
OpenAI, Meta and Amazon are circling the smartphone’s turf as the rise of generative AI pushes Big Tech to rethink the device people use to search, shop and talk. The Economist said the Apple-Android duopoly is now being tested by new hardware bets, from smart glasses to screen-light gadgets. Economist
The timing matters because the smartphone has been the front door to the internet for two decades. If AI assistants become the main interface, the company that controls the device — and the data stream behind it — can also shape where money flows, from subscriptions to ads.
It also lands as phone makers brace for a weaker year. Yang Wang of Counterpoint Research expects global smartphone shipments to fall by about 6% this year and does not see a rebound in 2027, according to the report.
The Economist pointed to a new crop of challengers trying to sidestep the phone screen entirely. In a recent interview with Laurene Powell Jobs, OpenAI chief Sam Altman hinted that his planned device would feel different, comparing smartphone use to “walking through Times Square”.
OpenAI said on Jan. 19 it was on track to unveil its device in the second half of the year, the report said. Two days later, it was reported that Apple was working on a wearable pin aimed at blunting whatever Altman and former Apple designer Jony Ive are building.
Meta, which has been developing AI-powered smart glasses, is shifting resources away from virtual-reality headsets to speed that effort, the report said. Amazon has rolled out Alexa+, its upgraded AI assistant, to Echo smart speakers and plans to bring it to Echo smart glasses and earbuds.
Component costs and chip supply are part of the squeeze. Wang said the cost of the 12 gigabytes of DRAM commonly used in smartphones has risen by $70 over the past 15 months as data-centre investment tightens supply, the report said.
Wang also flagged what he called a “foundry war” — a fight for capacity at chipmakers that manufacture semiconductors for others. Smartphone customers such as Apple and Samsung are ceding ground to designers of AI chips like Nvidia, whose products are more profitable for foundries to build, the report said.
Challengers have their own reasons to push. Developers can pay Apple commissions of up to 30% on purchases made through apps, the report said, while OpenAI must hand over a slice of consumer subscriptions bought on iPhones or Android devices. Meta has also looked for ways to reduce its reliance on the phone ecosystem since Apple’s 2021 change that let users opt out of being tracked across apps and websites, the report said.
But new form factors have a bad track record and hard physics. Google’s smart glasses were halted a year after their 2014 release partly over privacy fears, the report noted, and wearables still struggle with heat and battery limits. Humane’s AI pin, launched in November 2023, flopped and the company folded last year, the report said.
Even if smart glasses gain users, they may not replace phones so much as lean on them. Qualcomm executive Alex Katouzian said “edge” gadgets could spread, but may need a companion “puck” or even a smartphone in the pocket to handle heavy computing, the report said, while Meta CEO Mark Zuckerberg has argued glasses users will “stare at them less” rather than ditch them entirely.
The shift also runs into a quieter problem inside today’s phones: AI hardware that is still not fully used. FindArticles said handset makers have spent years adding NPUs — neural processing units, chips designed to run AI math efficiently on the device — but day-to-day value remains narrow because software is fragmented and developers often lack consistent access across brands. Findarticles
Android Authority made a similar case, arguing that mobile AI still lacks a stable, cross-vendor platform that developers can rely on, after years of vendor-specific toolkits and abandoned interfaces. It pointed to Google’s LiteRT, introduced in 2024 as a refocusing of TensorFlow Lite, as an attempt to smooth how apps use CPUs, GPUs and supported NPUs across devices. Androidauthority
Apple and Google are not standing still. The report said the pair are deepening collaboration in AI, with Apple planning to use Google’s Gemini models for an upgraded Siri later this year, while Google has pushed Android XR for headsets and smart glasses — moves that could decide whether the smartphone fades, or just becomes the silent sidekick behind the next wave of AI gadgets.
