Auto Giants Pivot from Smartphones to AI and Smart Mobility

Several automakers previously ventured into the smartphone sector, but have recently scaled back these efforts across the board. Meizu has initiated organizational restructuring, with more than half of its employees set to leave the company. It has also suspended in-house smartphone hardware development, retaining only its software ecosystem offerings while seeking third-party hardware partnerships. This move is widely seen as a signal that Geely’s smartphone initiative has effectively come to an end. NIO has similarly downsized its smartphone team, integrating it into its digital cockpit division and significantly slowing hardware iteration. As a result, the once-heated trend of automakers entering the smartphone market has cooled rapidly. Initially, some automakers entered the smartphone business aiming to integrate mobile and vehicle ecosystems, unify user interfaces, enhance user experience, and gain control over valuable data assets. For instance, NIO chose to develop its own phone because many of its users rely on Apple devices—whose closed ecosystem makes deep integration with vehicle systems difficult—thus seeking greater autonomy. Industry experts noted that automakers hoped self-developed smartphones would reduce reliance on third-party phone makers for data access, address lagging performance in vehicle infotainment systems, and optimize voice interaction and underlying system architecture. However, today’s smartphone market is highly concentrated, making it extremely challenging for new brands to break through. Coupled with automakers’ need to prioritize core investments in automotive intelligence, scaling back smartphone operations has become a rational strategic choice. Companies like Geely have already achieved their initial goals—for example, leveraging Meizu to enhance smart cockpit capabilities. Meanwhile, automakers are now shifting focus comprehensively toward artificial intelligence (AI). Experts believe AI holds far greater potential than smartphone technology in areas such as personalized interaction and unlocking the value of mobility data, positioning it as a key driver of intelligent mobility. In contrast, smartphone giants like Huawei and Xiaomi have made smooth progress in entering the automotive sector, benefiting from their accumulated strengths in software, chips, and intelligent systems. Analysts point out that these phone makers have bypassed traditional barriers in powertrain engineering and aligned well with the industry’s ongoing shift toward intelligent transformation. The industry consensus is clear: future competition will center on integrated technological innovation rather than mere hardware expansion. Automakers should concentrate on AI and vehicle intelligence, enhancing overall competitiveness through cross-sector collaboration. Similarly, smartphone companies venturing into automotive manufacturing must leverage the momentum of intelligent mobility to drive effective integration of technological resources.