AI innovation is emerging as a new growth engine for the smartphone industry. More specifically, the industry-wide spread of the use of generative AI, represented by ChatGPT, made the on-device AI technology one of the key factors determining a smartphone’s competitiveness. At the center of on-device AI, which enables users to tap into AI anytime, anywhere without an internet connection, is the smartphone, now an indispensable part of our daily lives. Mobile phones have evolved beyond simple communication devices to smartphones, and now they are dramatically enhancing various user experiences, equipped with on-device AI functions. In addition, the growing demand for smartphones that are highly portable, easy to use and have large high-definition screens led to rapid advancements in the technologies and related components that support these features. This has triggered a competition among global companies to innovate the form factor of smartphones, including various types of foldable phones and slim phones that are light and slim.

Despite the high proportion of overseas production of smartphones, the production volume of the Korean telecommunications device industry increased by 8.4% year-on-year to reach KRW 36 trillion in 2024, driven by increased exports. Smartphone exports also exceeded USD 5.6 billion in 2024, an increase of 9.3% year-on-year. Looking at the global smartphone market share in 2024, Samsung Electronics maintained the top spot with approximately 19%. Analyses show that the high market share is a result of the increased demand for its new flagship smartphone, which was the first in the world to feature generative AI capabilities.

Smartphones are smart devices that make our daily lives more convenient and efficient, with features such as AI assistants, fintech, healthcare, and smart home services, and they are powered by technologies of the Fourth Industrial Revolution, such as AI, IoT, and virtual augmented reality. Moreover, the smart device industry involving smartphones and tablet computers has a large industrial ripple effect since the importance of IT convergence and smart features trigger the connection with software, applications and mobile content as well as the incorporation of cutting-edge parts such as mobile semiconductors, displays, sensors, and communication components. In this regard, countries around the world are introducing government policies to enhance their core competitiveness in smart devices, including advanced technologies and components.

The South Korean government has established the 1st Master Plan for Development of National Strategic Technology (2024-2028) in August 2024 for developing twelve national strategic technologies needed to promote the supply chain, new industries, and foreign and security affairs. The plan presents three key tasks for developing the twelve national strategic technologies (i.e., semiconductors, displays, secondary batteries, next-generation communication (6G), and artificial intelligence), including supporting rapid commercialization, preemptively responding to technology security, and promoting mission-oriented R&D innovation. For next-generation communication, the Master Plan includes dominating 6G technologies and standards, and increasing the share of domestically-developed next-generation components in 6G terminals and base stations. The plan is expected to make a significant contribution to preemptively securing future core technologies and component capabilities for South Korean smartphones and strengthening the industrial ecosystem.

The mobile communication network is a key factor that determines the competitiveness of smartphones as they function as mobile communication terminals. In particular, 6G, which is expected to be commercialized around 2030, will feature much faster speeds, ultra-low latency, and advanced hyper-connectivity than 5G, as well as hyper-space, hyper-intelligence, and hyper-reliability. This will enable real-time remote surgery and holographic communication, and more effective metaverse and artificial intelligence services. As 6G is expected to serve as a game changer for future industrial innovation, countries are competing to invest heavily in core technologies. In February 2023, South Korea announced the K-Network 2030 Strategy and presented policy tasks to achieve three major goals: developing the world's best 6G mobile communication technology, innovating software-based networks, and strengthening the network supply chain.

Samsung Electronics is a global leader maintaining the largest share of the global smartphone market. Although the market size is still small, Samsung Electronics ranked first in the global foldable phone market in 2024 with a share of about 52%. Samsung Electronics is leading innovation in the smartphone market, including the world's first 5G smartphone and foldable phone in 2019 and the world's first AI smartphone in 2024. Moreover, with the development of new technologies and the advancement of consumer needs, Samsung Electronics is investing in a variety of smartphone designs, including slim phones with reduced thickness and weight, and multi-foldable phones that can be folded more than twice, to provide consumers with a personalized AI experience. To prepare for the era of 6G and AI, Samsung Electronics released a white paper on 6G in February 2025, outlining the direction of research for next-generation mobile communications. In addition, Samsung has installed the generative AI model Gemini on its smartphones by partnering with Google. In February 2024, it acquired the British AI startup Oxford Semantics Technologies and is focusing its capabilities on developing AI semiconductors, thereby strengthening its AI competitiveness.