AI-Driven Upgrade Cycle Expected to Fuel 8% Telecom Growth in 2026, NIQ Forecasts

On-device AI, ecosystem integration and premium innovation reshape global smart demand

NIQ (NYSE: NIQ), a global leader in consumer intelligence, today released its 2026 Smartphone Forecast showing that an AI-driven upgrade cycle is expected to fuel 8% growth in the global telecom sector in 2026. As manufacturers accelerate investment in on-device AI and connected device ecosystems, consumers are increasingly prioritizing intelligence functionality, seamless integration, and premium experiences when choosing their next smartphone.

The forecast suggests relatively stable conditions across the broader technology and durables market, with growth increasingly concentrated in premium segments. Europe is showing early signs of a new replacement cycle after two weaker years, while China is showing signals of modest growth despite subsidy rollbacks and a challenging comparison base.

Insights from Mobile World Congress 2026 suggest a broader industry shift: smartphones are evolving from standalone communication devices into intelligent platforms that connect and orchestrate consumers’ digital lives across wearables, home technology, mobility services, and AI-powered applications.

"Smartphones in 2026 are moving beyond connectivity and specifications toward intelligence and orchestration,” said Anastasia Bourneli, VP, Global Mobile Network, NIQ. “NIQ data indicates continued momentum toward premium, AI-enabled products that deliver meaningful gains in convenience, personalization and performance. As AI capabilities are expected to become more embedded in everyday experiences, on‑device performance and ecosystem compatibility are increasingly shaping consumer expectations, product strategies, and premium value creation.”

Key Findings from NIQ Smartphones forecast:

• Telecom sector forecast to grow 8% globally in 2026
• On‑device AI is emerging as a key source of differentiation in premium smartphones
• Consumer demands for seamless cross‑device integration continue to rise
• AI is shaping product design and upgrade decisions, with 9% of consumers buying phones for AI-driven performance improvements though it is not the primary purchase driver.
• Refurbishment and lifecycle strategies play a growing role in category economics with refurbished smartphones accounting for 8% of total market.

Smartphones evolve into digital life hubs

Smartphones are increasingly becoming the control center for connected consumer experiences. As consumers adopt more wearables, smart home devices, mobility platforms, and AI-powered services, expectations are shifting from standalone device performance to seamless ecosystem experiences. Consumer expectations are increasingly centered on:

• Ease of continuity across devices and services
• Faster, more responsive user experiences
• Greater personalization without reliance on constant cloud connectivity
• Integration with wearables, home technology, and mobility platforms

Agentic AI Expands On-Device Capabilities

Industry developments continue to point toward a transition from early AI features to more agent‑based, on‑device intelligence. Supported by advances in chipsets and neural processing units, smartphones are increasingly able to:

• Process AI workloads locally, improving responsiveness and privacy
• Assist with multi‑step tasks across applications
• Respond to user context with fewer explicit commands

Premium Segments Continue to Capture Disproportionate Growth

NIQ forecasting points to continued market polarization in 2026. While low to mid-range devices are expected to remain the primary source of unit volume, growth is increasingly concentrated in premium tiers where consumers perceive clear value from key performance features like battery life, camera, storage and AI-enabled experience, ecosystem integration, and high-performance hardware.

Rather than replacing traditional purchase drivers, AI is strenghening them. Advanced AI capabilities are enhancing the features consumers already prioritize, including camera performance, battery life, storage, productivity, and personalization, helping manufacturers further differentiate flagship devices and support premium pricing.

As a result, premium smartphones are increasingly positioned not simply as communication devices, but as central hubs for connected digital experiences across work, entertainment, health, mobility, and the home.

As smartphones become increasingly intelligent and interconnected, understanding which innovations influence consumer purchasing behavior can help inform competitive strategy. NIQ combines global technology and durables measurement with consumer intelligence, retail sales data, and advanced analytics to help manufacturers identify emerging demand, evaluate shifting consumer preferences, and make more confident product and investment decisions. Find out more.

Q&A: NIQ 2026 Smartphone Forecast

Q: What is NIQ forecasting for smartphones in 2026?
A: NIQ forecasts that smartphones will continue evolving into AI‑enabled platforms in 2026, with greater emphasis on on‑device intelligence, ecosystem integration, and differentiated premium experiences.

Q: What does “agentic AI” mean in the smartphone context?
A: Agentic AI refers to AI systems that can interpret context and perform coordinated tasks across applications or services, rather than responding only to single commands. On smartphones, this capability is increasingly supported by on‑device processing.

Q: Why is on‑device AI important?
A: On‑device AI reduces reliance on cloud processing, improving response speed, reliability, privacy, and usability—especially in real‑time or offline scenarios.

Q: How is AI influencing smartphone purchasing decisions?
A: AI capabilities are becoming a more visible factor in premium purchase decisions, contributing to differentiation among high‑end devices while reinforcing market polarization.

Q: Is the smartphone market growing overall?
A: NIQ forecasting indicates that growth remains uneven, with stronger momentum in premium segments and more stable or constrained dynamics in value tiers, depending on regional and economic conditions.

Q: How do ecosystems affect smartphone competitiveness?
A: Smartphones are increasingly evaluated as part of broader device ecosystems. Seamless integration with wearables, home devices, mobility platforms, and services can influence brand preference and long‑term consumer loyalty.

Q: What role do refurbished and lifecycle strategies play?
A: Refurbishment and lifecycle management support accessibility, sustainability, and value retention, and are becoming more strategically relevant as device longevity increases.

About NIQ

NielsenIQ (NYSE: NIQ) is a leading consumer intelligence company, delivering the most complete and trusted understanding of consumer buying behavior and revealing new pathways to growth. By combining an unmatched global data footprint and granular consumer and retail measurement with decades of AI modeling expertise, NIQ builds decision systems that help companies turn complex data into confident action.

With operations in more than 90 countries, NIQ covers approximately 82% of the world’s population and more than $7.4 trillion in global consumer spend. Through cloud-based platforms, advanced analytics and AI-driven insights, NIQ delivers The Full View™—helping brands and retailers understand what consumers buy, why they buy it, and what to do next.

For more information, please visit www.niq.com.

Forward Looking Statement:

This press release regarding smartphones forecast for 2026, may contain forward-looking statements regarding anticipated consumer behaviors, market trends, and industry developments. These statements reflect current expectations and projections based on available data, historical patterns, and various assumptions. Words such as “expects,” “anticipates,” “projects,” “believes,” “forecasts,” “plan,” “look ahead,” “indicates”, and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future outcomes and are subject to inherent uncertainties, including changes in consumer preferences, economic conditions, technological advancements, and competitive dynamics. Actual results may differ materially from those expressed or implied in these statements. While we strive to base our insights on reliable data and sound methodologies, we undertake no obligation to update any forward-looking statements to reflect future events or circumstances, except to the extent required by applicable law.

© 2026 Nielsen Consumer LLC. All Rights Reserved.

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