Sensor Evolution Amid Supply Chain Pressures
The smartphone industry faces persistent challenges in balancing performance, cost, and reliability. Hardware proximity sensors, long a staple for detecting when a device nears a user’s face during calls, contribute to rising bill-of-materials costs and expose manufacturers to supply chain vulnerabilities. Disruptions in semiconductor production, exacerbated by geopolitical tensions and raw material shortages, have pushed original equipment manufacturers (OEMs) toward alternatives that maintain functionality without physical components.
Elliptic Labs (OSE: ELABS), a pioneer in AI-driven virtual sensing, addresses these pressures directly. In December 2025, the company shipped its AI Virtual Smart Sensor Platform across seven models from vivo and HONOR, capping a year of expansion with deployments on 65 smartphones total. This milestone underscores a broader shift: OEMs increasingly favor software-only solutions to streamline production, cut costs, and enhance design flexibility.
Such transitions matter for C-suite leaders in electronics manufacturing. By virtualizing sensors, companies like Elliptic Labs enable thinner profiles, reduced power draw, and fewer failure points—critical in a market where average selling prices hover around $300 for mid-range devices, per IDC data, and margins remain razor-thin.
Operational Mechanics: How AI Virtual Proximity Sensor Works
At its core, the AI Virtual Proximity Sensor performs a fundamental task: it identifies when a smartphone approaches a user’s ear or cheek during a call. Traditional hardware sensors use infrared emitters and detectors, but Elliptic’s approach leverages existing device microphones and AI algorithms to infer proximity through acoustic signal analysis.
When a call begins, the sensor processes audio patterns—subtle changes in sound reflection and attenuation caused by proximity to skin. Machine learning models, trained on vast datasets of real-world usage, distinguish intentional ear placement from ambient noise or pocket jostling. Upon detection, the system deactivates the display and touch input, preventing errant touches that could end calls or launch apps. Simultaneously, screen blackout conserves battery, extending talk time by up to 5-10% in prolonged sessions, based on independent benchmarks.
This software-only design integrates seamlessly into Android ecosystems. It requires no additional chips, optics, or assembly steps, slashing per-unit costs by an estimated 20-30% compared to hardware equivalents. For OEMs, this means lower sourcing risks—no dependency on specialized suppliers prone to delays—and greater scalability across product lines.
Key technical advantages include:
- Robustness in varied conditions: Performs reliably in low-light, with cases on, or amid facial hair, where optical sensors falter.
- Privacy compliance: Processes data on-device, avoiding cloud transmission.
- Customization potential: OEMs can tune sensitivity thresholds for specific models, optimizing user experience.
Strategic Deployments: Vivo and HONOR Lead Adoption
Vivo’s December launches exemplify this technology’s mid-range penetration. The iQOO Neo11, Y500 Pro, and V60e target performance-oriented consumers, integrating the sensor to support immersive gaming-to-call transitions without hardware overhead. Meanwhile, the S50 and S50 Pro Mini emphasize slim aesthetics and battery endurance, areas where virtual sensing provides a competitive edge.
HONOR complemented this with its 500 and 500 Pro models, positioning them as premium mid-tier options. These devices, launched amid China’s fiercely competitive market—where vivo and HONOR vie for share against Xiaomi and Oppo—benefit from cost savings redirected toward superior displays and processors.
For 2025, Elliptic’s 65-model footprint signals accelerating momentum. This volume rivals early adoption curves of other sensor disruptors, like ultrasonic fingerprint tech from Qualcomm. Partnerships with vivo (a BBK Electronics subsidiary) and HONOR (ex-Huawei) highlight trust in Elliptic’s INNER BEAUTY framework, a proprietary suite optimizing virtual sensor performance.
Business Implications: Cost Reduction and Supply Chain Resilience
Executives evaluating sensor strategies should note the financial upside. Hardware proximity sensors add $0.50-$1.00 per unit, per Teardown.com analyses, compounding across billions of shipments. Elliptic’s platform eliminates this, enabling OEMs to allocate savings elsewhere—perhaps bolstering AI camera features or 5G modems.
Supply chain benefits extend further. The global sensor market, valued at $25 billion in 2025 (Statista), grapples with lead times averaging 20-30 weeks for IR components. Software sidesteps this entirely, allowing faster time-to-market. In scenarios like the 2024 chip shortage, virtual sensing proved resilient, as it leverages commoditized audio hardware already ubiquitous.
Risk mitigation also plays in: hardware failures, such as lens contamination, account for 2-5% of field returns in proximity-equipped devices. Virtual alternatives reduce warranty claims, improving net promoter scores and customer retention.
Yet challenges persist. Algorithmic accuracy demands rigorous testing across demographics—ensuring parity for diverse ear shapes or accents. Elliptic mitigates this through continuous over-the-air updates, a vector for long-term refinement.
Broader Market Outlook: Toward Ubiquitous Virtual Sensing
Elliptic Labs’ 2025 shipments position it as a bellwether for sensorless design. With Android’s sensor HAL (Hardware Abstraction Layer) increasingly supporting virtual alternatives, expect proliferation into foldables, wearables, and IoT. Vivo and HONOR’s moves signal validation in high-volume segments, where China dominates 40% of global smartphone production (Counterpoint Research).
For industry leaders, the takeaway is clear: software-defined sensing isn’t a niche; it’s a pathway to margin expansion amid commoditization. OEMs prioritizing it gain agility, while laggards risk cost disadvantages. Elliptic’s platform, with INNER BEAUTY enhancements, sets a benchmark—65 models in one year foreshadows deeper ecosystem integration by 2027.
As tariffs and trade frictions reshape electronics sourcing, virtual sensors offer strategic insulation. Procurement teams should audit suppliers like Elliptic for scalability; design engineers, for integration ease. The result: devices that perform reliably, at lower cost, without compromising user trust.
About Elliptic Labs
Elliptic Labs’ AI Virtual Smart Sensor Platform™ brings contextual intelligence to devices, enhancing user experiences. Our technology uses proprietary deep neural networks to create AI-powered Virtual Smart Sensors that improve personalization, privacy, and productivity.
Currently deployed in nearly 1 billion devices, our platform works across all devices, operating systems, platforms, and applications. By utilizing system-level telemetry data to cloud-based Large Language Models (LLMs), the AI Virtual Smart Sensor Platform delivers the unrivaled capability to utilize output data from every available data source. This approach allows devices to better understand and respond to their environment, making technology more intuitive and user-friendly. At Elliptic Labs, we’re not just adapting to the future of technology – we’re actively shaping it. Our goal is to continue pushing the boundaries of contextual intelligence, creating more intuitive and powerful experiences for users worldwide.
Elliptic Labs is headquartered in Norway with presence in the USA, China, South-Korea, Taiwan, and Japan. The company is listed on the Oslo Stock Exchange. Its technology and IP are developed in Norway and are solely owned by the company.
