In today's rapidly evolving technological landscape, the consumer electronics sector is undergoing unprecedented changes, primarily driven by the remarkable advancements in artificial intelligence (AI). From AI smartphones to AI-integrated computers and smart glasses, AI is progressively reshaping our everyday livesThis article will delve into the latest trends in AI technology, analyzing the convergence between AI and consumer electronics, while also exploring the investment potential of consumer electronics ETFs (code: 159732) and the advantages of index investing.

One of the most significant milestones in AI technology is the introduction of the DeepSeek-R1 high-performance inference model, representing a pivotal shift from cloud-based to edge computingThis model achieves a dramatic reduction in the costs associated with large model inference—making it just one-fifth of traditional methods—while facilitating complex tasks such as real-time translation and multimodal interactionsSuch technological breakthroughs herald three major transformations in the consumer electronics industry:

First, the evolution of smart hardware is evidentWith AI model deployment at the edge, devices like smartphones, computers, and glasses are transitioning into “intelligent assistants.” For instance, AI-enhanced glasses can analyze visual information in real-time and utilize local models to provide feedback instantly.

Second, natural interaction methods are being revolutionizedTechnologies that facilitate voice commands, gesture controls, and eye-tracking are becoming mainstreamThe adaptability of models like DeepSeek with Meta Llama3 has enabled devices to better interpret user intentions, leading to more intuitive interactions.

Finally, the AI technology's penetration across the industry chain—into areas such as chip design (like NPU cores) and advanced sensors (like 3D ToF cameras)—is driving a trend of hardware specification upgrades.

In addition to DeepSeek, various AI technologies have made significant strides in image recognition and voice interaction, enabling consumer electronics products to understand and respond to user needs more intelligently.

Turning to the AI + hardware space, we can observe how the integration of AI across three major application scenarios is creating a compelling narrative:

Firstly, consider AI smartphones, which have evolved from mere tools to indispensable life companions

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The incorporation of AI into smartphones has introduced several groundbreaking featuresFor example, AI enables smart scene recognition, night mode enhancement, and portrait blurring, allowing everyday users to capture professional-grade photos effortlesslyFurthermore, voice assistants enhance user experience by allowing tasks to be accomplished through voice commands, from sending messages to accessing reminders, markedly increasing usability.

AI is also instrumental in intelligent resource scheduling within smartphones, optimizing CPU and GPU allocations based on user habits and current tasks, resulting in smoother operation and reduced latencyAdditionally, AI can optimize battery management by learning user charging and usage patterns, thus extending battery lifespan.

Market research indicates that sales of AI-equipped smartphones are on the rise, with projections suggesting that they will account for over 90% of the market in the coming yearsAccording to IDC, global shipments of AI smartphones are expected to reach 520 million units by 2025, with China's share exceeding 35%.

Second, AI computers are redefining productivity toolsIn office environments, AI-enhanced PCs support intelligent voice input, automated document formatting, and smart content proofreadingQuick and accurate voice-to-text capabilities are dramatically improving text input speeds, while automated formatting and proofreading increase office efficiency by reducing manual errors.

In terms of entertainment, AI capabilities facilitate real-time optimization of game graphics and intelligent character interactions

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This leads to an enhanced gaming experience, where rendered visuals are of higher quality and more fluid, allowing players to enjoy immersive gameplayAdditionally, as remote work and online education become more widespread, the demand for high-performing, AI-equipped computers is surging, making AI a pivotal factor in industry competitionLeading PC manufacturers are increasingly releasing AI-enabled products to meet market demand.

According to Huatai Securities, it is projected that by 2025, AI PCs will account for over 50% of the overall PC market share.

Third, next-generation interaction is redefined by AI glasses, projected to make 2025 the "Year of AI Glasses." Equipped with a multitude of sensors and AI technologies, these smart glasses aim to provide voice interaction, image recognition, and navigation guidance featuresUsers will be able to conduct queries, capture videos, and control devices using voice commandsImage recognition will facilitate object and text identification, allowing users easy access to informationAdditionally, navigation features will enable users to find their way in unfamiliar environments quickly.

In the medical field, intelligent glasses can assist doctors during surgeries or while reviewing medical recordsWithin industrial settings, workers can rely on smart glasses for operating guidelines and maintenance instructionsIn consumer markets, users can experience immersive entertainment such as viewing 3D films or engaging in augmented reality gaming.

Securities analysis suggests that the AI glasses industry chain includes upstream chips (like Horizon Journey series), midstream manufacturing (like GoerTek), and downstream application development, with market size potentially exceeding RMB 100 billion by 2025.

Regarding the investment landscape in consumer electronics under the realm of AI technology, the industry continues to maintain a robust growth trajectory globally

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Recent industry analyses show that the consumer electronics market will expand at an annual rate of 10% in the coming years, particularly enhanced by emerging technologies such as 5G, AI, and the Internet of Things, which continuously broaden application scenarios and maintain high market demand.

Investment in consumer electronics, particularly through index investing, reveals significant advantagesThe consumer electronics ETF (code: 159732), managed by Huaxia Fund Management Co., tracks the national index theme of consumer electronics, spanning components, complete manufacturing, and brand servicesAs of February 21, 2025, the fund has exceeded RMB 2.6 billion, with notable net inflows exceeding RMB 700 million since February this year, indicating substantial market recognition.

Moreover, investing in a consumer electronics ETF provides a diversified approach across a basket of related companies, shielding investors from the substantial impact of operational risks associated with individual firms or market fluctuationsCompared to direct stock investments, index funds can effectively mitigate unsystematic risks, enhancing asset stability for investors.

In conclusion, consumer electronics ETFs represent the “hardware foundation” for the AI era.

With DeepSeek sparking a technological revolution and a transformative “battle of lenses” redefining interaction methods, the consumer electronics ETF (159732) has emerged as a key instrument for capitalizing on the burgeoning AI hardware dividendThis evolution not only underscores the collective rise of the industry chain but also reflects China's strategic shift from “following” to “leading” in technology

For investors, this represents an opportunity to share in the innovative dividend and participate in a significant chapter of national technological resurgence.