Yahoo Finance Samsung is leaning on AI to power device sales
Samsung took the wraps off of a litany of new devices on Wednesday during its Unpacked event in Paris, France. Not only did the company show off its latest foldable smartphones, the Android-powered (GOOG, GOOGL) Z Fold 6 and Z Flip 6, and its next-generation smartwatches, the Galaxy Watch 7 and Galaxy Watch Ultra, it also launched its highly anticipated Galaxy Ring.
But the star of the show was the company’s Galaxy AI platform. A suite of software products the company initially launched with its Galaxy S24 line of smartphones earlier this year, Galaxy AI includes a number of generative AI capabilities that touch on everything from Samsung’s health and fitness apps to its photo, productivity, and web browser offerings.
The strategy is clear: Samsung is banking on its AI efforts, which include some of Google’s AI magic, to help power its device sales going forward. But the company’s longtime nemesis, Apple (AAPL), is just months away from launching its own AI software, which could sway Samsung users to the iPhone’s side.
The AI era
Samsung’s latest devices are certainly impressive. I’m a fan of both of its foldables, and its smartwatches are some of the most capable around. Adding in its Galaxy Ring could give Samsung a nice foothold in a still relatively small market. But the company is clearly focused on ensuring that its AI capabilities are front and center alongside each of its new products.
Samsung has demonstrated how Galaxy AI fits into the Galaxy Ring, Watch 7, and Watch Ultra thanks to the addition of the company’s new Energy Score feature. The company says the software uses Galaxy AI to help calculate how you’ve slept, how much exercise you’ve gotten recently, and more to provide you with a numerical representation of your overall fitness level that you can use to better understand why you might be more tired or energetic on certain days.
It’s also shown off its conversation mode feature, which lets you have a conversation with someone speaking a different language by turning the Fold's and Flip’s covers and main screens into digital whiteboards that display what you and the person you’re chatting with are saying in your own languages. The app also reads the translated text out loud.
Samsung has similarly brought generative AI features to its photos app, allowing you to do things like draw sunglasses on a person in an image and automatically generate and place realistic-looking glasses on the subject’s face. Samsung also uses some of Google’s AI capabilities, adding the company’s Gemini software and assistant to its devices.
An incentive to stay and upgrade
Like Apple, which debuted its Apple Intelligence generative AI initiative at its WWDC event in June, Samsung is using AI as a means of differentiating its latest hardware offerings from its older devices in the hopes that Galaxy AI and its features will get customers who have been holding onto their phones for two years or longer to pony up for newer, pricier options.
Unlike Apple, which is only making its AI options available on its iPhone 15 Pro and future phones, Samsung is rolling out its Galaxy AI software to a handful of prior-generation products including the S22 and Z Fold and Flip 4 series from 2022 and S23 and Z Fold and Z Flip 5 series from 2023.
With consumers holding onto their smartphones for between two and three years, that makes sense. It gives users a taste of Galaxy AI at a time when they’re just about ready to upgrade, adding an incentive to stick with Samsung and continue taking advantage of its generative AI features.
The Korean tech giant says customers are already using its AI software at a decent clip, with the company reporting that 77% of S24 owners access AI features every week. And with Samsung raising the prospect of charging a fee for its AI services in the future, its Galaxy AI offerings could not only get customers to stick with the company and upgrade to its latest phones but open up a new revenue stream as well.
Of course, that could also depend on what Apple ultimately decides to do with its Apple Intelligence services. If Samsung charges for its AI software and Apple doesn’t, it could incentivize customers to switch to the iPhone.
Either way, both companies are entering into a new race to see which can outdo the other in terms of the generative AI know-how. And while Samsung has a sizable lead in getting its software to market, Apple is just a few months away from launching its own AI platform. Time will tell if either AI service is capable enough to drive increased sales or not.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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