AI has spent the last few years changing software. 

Now it’s changing hardware too. 

That shift is already visible in the latest generation of AI PCs, but it goes much further than laptops. We are beginning to see AI built into storage systems, cameras, smart home technology and other connected devices. 

That’s where the conversation gets interesting. 

Because when AI becomes part of the hardware itself, it changes more than the specification of the product. It changes what the product can do, who might buy it and, importantly, what customers expect from it.

What is AI hardware?

AI hardware is, quite simply, physical technology designed to run, support or accelerate artificial intelligence workloads. 

That can mean a PC with a dedicated Neural Processing Unit (NPU), a device with a specialist AI processor, or a connected product capable of running AI models locally. 

The important part is that AI is no longer necessarily something happening somewhere else. 

Traditionally, a device might collect information and send it to a cloud service where the AI processing takes place. With local AI, some or all of that processing can happen on the device itself. 

There are practical reasons for doing this. 

Local processing can reduce reliance on an internet connection, improve responsiveness and give users greater control over where their data is processed. The right approach depends heavily on the application, but the underlying idea is becoming more relevant: the hardware itself can now be part of the AI solution. 

And we think that will have an impact on the wider technology market. 

 

AI is becoming a reason to buy the hardware 

For a long time, AI was something you accessed through a device. 

• You bought the laptop and then used an AI application on it.
• You bought the phone and downloaded an AI-powered app.
• You bought the camera and used software to analyse the footage. 

Increasingly, manufacturers are approaching this from the other direction. 

The AI capability is influencing how the hardware is designed in the first place.

AI is already changing the smartphone 

Smartphones have been using AI for years, even if we haven’t always called it that. 

Cameras use machine learning to recognise scenes and improve images. Voice assistants interpret spoken commands. Phones can identify objects, translate languages and optimise battery performance based on how a device is being used. 

What’s changing is how much of that processing can happen directly on the device. 

The latest smartphones are increasingly being designed with AI capabilities in mind, with more powerful processors and dedicated hardware built to handle AI workloads. 

That matters because a smartphone is already one of the most personal and frequently used pieces of technology most people own. 

It has access to our photos, messages, contacts, location, documents and daily routines. 

The more capable the device becomes at understanding and processing that information, the more useful AI can potentially become. 

And the more important the hardware becomes in making that possible.

From AI features to AI-enabled devices 

 
There is a difference between putting an AI feature on a phone and designing a device around AI. 

We’re starting to see manufacturers move towards the latter. 

AI is becoming part of how smartphones are marketed and differentiated, alongside the things we’ve traditionally looked at such as camera quality, battery life, screen technology and processing performance. 

That could change how people decide which phone to buy. 

Instead of simply asking whether a phone has a better camera or faster processor, customers may increasingly ask what the device can actually do for them. 

• Can it summarise information?
• Can it translate conversations?
• Can it search through content intelligently?
• Can it help create or edit content?
• Can it perform certain AI tasks without sending everything to the cloud? 

These are becoming part of the smartphone conversation. 

Local AI is where things get particularly interesting

One of the biggest developments we’re watching is the move towards local AI. 

Rather than sending every AI request to a cloud-based system, some processing can happen directly on the device. 

There are obvious potential benefits. 

It can mean faster responses, reduced reliance on connectivity and greater control over where certain information is processed. 

That doesn’t mean cloud AI is going away. It won’t. 

There will always be tasks where the scale and processing power of the cloud make more sense. 

But smartphones and other connected devices are becoming powerful enough to take on more AI workloads themselves. 

And that opens up possibilities beyond simply using an AI chatbot through an app.

It isn’t just smartphones

While smartphones are an obvious place to see this shift, the same thinking is starting to appear across other categories. 

UGREEN HomeAgent is a good example. 

UGREEN is a brand we already work with, particularly across charging, connectivity and accessories. Its move into local AI hardware is therefore an interesting development for us. 

HomeAgent is designed as a local AI hub that brings storage, computing and AI together, connecting with devices such as cameras and smart home equipment. 

Rather than simply storing files or acting as another network device, the system is designed to work with the information it holds and use AI to make that information more useful. UGREEN highlights features including AI-powered searches, event summaries and local recognition of people, vehicles, pets and other activity. 

It’s a useful example because it shows that AI hardware doesn’t have to mean an AI PC or a smartphone. 

The same technology can change what an entirely different category of device is capable of. 

And we’re likely to see more of that. 

What does this mean for phones?

This is probably the more interesting question for us. 

Smartphones are already the centre of a huge amount of our digital lives. 

They’re cameras, communication tools, payment devices, navigation systems, entertainment platforms and work devices. 

Adding more capable AI into that mix could make them even more useful. 

But it also raises the bar for the hardware. 

AI workloads require processing power. They can require more memory. They can place different demands on battery life and thermal management. 

That means AI isn’t just something manufacturers can add to a product specification and forget about. 

It can influence the underlying design of the device. 

And that could have a knock-on effect across the mobile market.

The smartphone market could become more about what the device can do 

The mobile industry has traditionally competed heavily around specifications.

• More megapixels.
• Faster processors.
• Bigger screens.
• Longer battery life.
• More storage.

Those things still matter.

But AI gives manufacturers another way to differentiate.

The interesting question becomes less about how powerful a specification looks on paper and more about what that power enables.

A phone with a particularly capable processor isn’t necessarily more useful simply because the processor is faster.

If that processing power allows the phone to translate conversations in real time, intelligently organise information, improve accessibility or run useful AI functions locally, there is a much clearer customer benefit.

That’s where we think the conversation will increasingly move.

Not “How much AI does this phone have?” but “What can this phone actually do with it?”

And that matters to the channel

For technology providers, new technology categories always create a learning curve. 

It’s not enough to know what the product is. 

You need to understand who it is for, what problem it solves and how to explain that value to the customer. 

AI makes that particularly important because the technology can be difficult to see. 

A customer can hold a phone in their hand and see the screen, camera and physical design. 

They can’t necessarily see the AI processing happening underneath. 

That means the industry has a job to do in turning technical capability into something customers can understand. 

And there is a commercial opportunity there too. 

As smartphones become more capable, the conversation around them can become broader. 

The phone itself is still the starting point, but there can be requirements around connectivity, accessories, device management, security, fulfilment and the wider lifecycle. 

That’s an area EGE already understands well.

AI doesn’t make every device better 

There is also a point worth making amid all the excitement around AI. 

Not every device needs more AI. 

And not every AI feature will be useful. 

We’ve seen plenty of technology trends come and go because the technology was interesting, but the use case wasn’t strong enough. 

The products that stand out will be the ones where AI genuinely makes something easier, faster, more useful or more secure. 

That’s what we’ll be looking for. 

Not simply which manufacturers are putting AI on the box, but which products are using it in a way that actually benefits the person using the device.

What happens next?

It’s difficult to predict exactly where AI hardware will go. 

We will undoubtedly see more AI-enabled smartphones. We’ll see more AI PCs. We’ll see connected devices with increasingly sophisticated local processing. 

We’ll also see products that don’t fit neatly into the categories we’re familiar with today. 

UGREEN HomeAgent is a good example of that shift. It takes a familiar category and asks what it could become if AI was built into the proposition from the beginning. 

For EGE, connected technology remains at the heart of what we do. 

But tech doesn’t exist in isolation. 

It’s part of a much wider connected technology market, and AI is starting to influence almost every part of that market. 

So we’re paying attention. 

Because the next generation of mobile technology isn’t just going to be about better hardware. 

It will be about what that hardware is capable of doing. 

And as AI becomes a bigger part of the devices we use every day, that could change the mobile market in some interesting ways.