• Member
• October 20, 2025

New Smile Curve in an AI Dominated Landscape

An emerging  perspective on how AI could reshape the traditional "smile curve." Based on your description, the new curve would indeed be flatter, reflecting a more balanced distribution of value across the entire supply chain.

The traditional smile curve is characterized by high value at the upstream (R&D, Design, Branding) and downstream (Marketing, Sales, After-Sales Service) extremes, with the midstream (Manufacturing, Assembly) capturing the least value.

The new "Balanced Value" curve, as you propose, will be flatter and more akin to a slightly upward-tilting line or a very shallow curve, where value is elevated at every stage.

Key Shifts in Value Capture

Here is how value capture would change across the three main stages:

●      Upstream (R&D, Design, Innovation):

○      Value: Increased, but less disproportionately high.

○      Driver: Value is driven by AI-enhanced Smart Design and Genuine Innovation. AI accelerates R&D, identifies unmet customer needs, and simulates product performance, making the design phase more efficient and better targeted. The "branding" component's value is slightly curtailed as the impact of mere advertising diminishes.

●      Midstream (Smart Manufacturing, Production, Logistics):

○      Value:  Significantly Increased.

○      Driver: Value is driven by  Intelligent Optimization Smart Manufacturing , predictive maintenance, dynamic quality control) and Optimized Logistics  (e.g., dynamic routing, inventory management) become major differentiators, transforming the midstream from a low-value commodity process into a high-value source of efficiency, quality, and speed.

●      Downstream (Service, Customer Feedback, Reputation):

○      Value: Substantially Increased.

○      Driver: Value is driven by Customer-Validated Excellence. AI's ability to analyze genuine customer feedback (voice-of-the-customer) means reputation and loyalty are directly tied to Service and Product Quality. The value shifts from pure Ad Spend/Mass Marketing to Genuine Customer Success and continuous product improvement based on data, making this an extremely high-value stage.

The new curve recognizes that in a transparent, AI-informed market, mediocrity is penalized, and excellence at every stage is rewarded.