Samsung Electronics Co. Ltd (SSNLF) is making an aggressive push into artificial intelligence, announcing plans to double the reach of its Galaxy AI features to roughly 800 million devices by 2026. It's a bold move that puts the Korean tech giant squarely in competition with Apple Inc. (AAPL) and its AI-powered iPhone lineup.
The company has already deployed Galaxy AI, largely powered by Alphabet Inc. (GOOGL) Google's Gemini models, across about 400 million smartphones and tablets. Co-CEO TM Roh told reporters that Samsung intends to embed AI across all products, functions, and services, using the technology to regain momentum against Apple in the intensely competitive smartphone market.
Galaxy AI combines features powered by both Google's Gemini and Samsung's own Bixby assistant, creating what the company hopes will be a comprehensive AI ecosystem that can match or exceed what Apple offers.
Margin Pressure and Foldable Frustrations
But Samsung's AI ambitions come with some significant challenges. Roh warned that higher memory costs are putting pressure on smartphone margins, which could force the company to raise prices. That's not exactly great timing when you're trying to win customers back from Apple.
The foldable phone situation isn't much better. Roh acknowledged that foldables are growing more slowly than Samsung expected, held back by engineering challenges and limited software support. He's still optimistic that foldables will reach mainstream adoption within two to three years, but that timeline keeps getting pushed out.
Apple's iPhone 17 Surge
Meanwhile, Apple is pulling ahead in the global smartphone race. Strong demand for the iPhone 17 is powering a resurgence in Apple's handset business, with the company beating fourth-quarter revenue and earnings expectations. Apple is now on track to reclaim the title of world's largest smartphone maker for the first time since 2011.
The numbers tell the story. Counterpoint Research data shows Apple is on pace for 10% year-over-year unit growth in 2025, more than double Samsung's expected 4.6% growth. That's a meaningful gap, and it could widen further if Apple maintains its momentum in China, launches the rumored lower-cost iPhone 17e, or eventually releases a foldable iPhone.
For Samsung, the path forward is clear but challenging. The company needs its AI expansion to translate into actual sales growth while managing rising costs and delivering on the promise of foldables. It's a lot to juggle, especially with Apple hitting its stride again.
AAPL Price Action: Apple shares were up 0.07% at $271.20 at the time of publication on Monday.
