The smartphone’s long-standing reign as the primary gateway to the digital world faces new scrutiny as tech executives weigh the impact of artificial intelligence.
While the device remains a massive revenue driver, industry leaders are questioning whether current hardware can sustain its position against emerging AI-integrated technologies.
Apple’s iPhone generated $54.3 billion in sales during the three months ending in June 2026, marking a 22% increase over the same period the previous year.
Despite this growth, OpenAI CEO Sam Altman has publicly questioned the future of the smartphone, suggesting the form factor is ill-suited for the demands of artificial intelligence.
Consuming Half Battery in One Hour
Smart glasses are emerging as a primary contender to challenge the smartphone’s hegemony. These devices, including the Ray-Ban Meta glasses, offer hands-free AI interaction, though they currently struggle with significant hardware hurdles. Early testing revealed that the Ray-Ban Meta glasses consumed half their battery life in just one hour of intensive video use.
Market scale remains a major barrier for these wearables.
Analysts estimate that only 15 million pairs of smart glasses will be shipped this year, a fraction of the more than one billion smartphones expected to reach consumers. Even with the popularity of Meta’s Muse assistant—which became the most downloaded app in the United States following its September launch—the smartphone retains its massive installed base.
Expanding the AI Interface
Tech companies are now experimenting with new ways to integrate AI into existing accessories. Apple is reportedly developing AirPods equipped with cameras, intended to give the Siri assistant visual capabilities. This would allow users to request recipes based on ingredients they see or receive directions without ever handling a phone.
Meta is simultaneously preparing the launch of the Muse Charm, a standalone, keychain-sized device that provides access to its Muse AI via voice and a small screen. These developments change the battle for control over the digital interface, focusing on three distinct layers: hardware, distribution, and raw intelligence.
The Race for Digital Control
The competition for the next digital interface is playing out across multiple fronts among the industry’s largest players. Amazon has integrated AI into its Alexa assistant, which is currently connected to more than 600 million devices. Google’s AI-powered search summaries reach over 2.5 billion people monthly, supported by the Android operating system running on more than 3 billion devices globally.
OpenAI is moving beyond software to capture the hardware market as well. The company acquired Jony Ive’s startup, Io, for $6.5 billion to develop dedicated AI devices. This move aims to provide ChatGPT with a direct path to consumers, bypassing the distribution networks currently controlled by competitors like Apple and Google.
Impact on Consumer Services
The rise of AI agents threatens to disrupt traditional sectors such as banking, telecommunications, and insurance. These agents could eventually handle research and contract negotiations on behalf of consumers, potentially eliminating the friction that keeps customers loyal to specific service providers.
Businesses are now facing the risk of losing their direct relationship with consumers if AI agents become the primary interface for shopping and service procurement. Amit Joshi, a professor at the IMD Business School, suggests that companies should investigate whether AI agents can already locate their products and complete transactions without a customer ever visiting a company website.
Common Questions on AI Hardware
No. While smartphones face challenges, they remain dominant with over one billion units shipped annually. If the smartphone loses its position, analysts expect the transition to be gradual rather than a sudden displacement.
AI agents act as intermediaries that can search for products and make purchases for users.
Companies like Amazon have already moved to block certain AI assistants from making purchases on their platforms to maintain control over the transaction process.
Firms are competing to control the “gateway” to the consumer. By owning the hardware or the primary AI interface, companies can capture a larger share of the money spent on digital transactions, travel bookings, and shopping.
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