Software Overtakes Hardware in New 20-Model Smartphone Deal

OSLO, NORWAY – December 29, 2025 – In a significant move highlighting the growing shift from physical hardware to intelligent software in consumer electronics, AI software company Elliptic Labs (OSE: ELABS) has announced a major contract expansion with one of the world's top-five smartphone manufacturers. The new licensing agreement will embed Elliptic Labs' AI Virtual Proximity Sensor™ technology in an estimated 20 or more new smartphone models scheduled for launch throughout 2026 and 2027.

This long-term agreement deepens an existing relationship with the unnamed electronics giant and signals strong, sustained confidence in Elliptic Labs' software-only solutions. The deal, which includes a guaranteed minimum license fee per model, provides the Norwegian company with a predictable revenue stream and solidifies its position as a critical supplier in the highly competitive smartphone component market.

“This agreement reflects long-term confidence in our technology and our ability to deliver consistently in high-volume smartphone programs,” said Ola Sandstad, CEO of Elliptic Labs, in the company's announcement. “The shift toward AI in devices is real, but it needs to be dependable. Our embedded software-defined sensors are mature, they work in all user environments, and they help customers improve their phone design — model after model.”

The Disappearing Sensor

The technology at the heart of the deal is Elliptic Labs’ AI Virtual Proximity Sensor, marketed as INNER BEAUTY®. This software solution performs a crucial function that has historically been handled by a dedicated piece of hardware: an infrared (IR) proximity sensor. Its primary job is to detect when a user holds their phone to their ear during a call, which allows the device to automatically turn off the display and disable touch functionality.

This simple action prevents the user's cheek or ear from accidentally pressing buttons, hanging up the call, or muting the microphone. It also plays a vital role in conserving battery life. For years, this function required a physical sensor, which manifested as a small black dot or was housed within the screen's bezel or notch, dictating certain aspects of a phone's industrial design.

Elliptic Labs' innovation replaces this hardware entirely. By using proprietary algorithms and machine learning, the AI Virtual Proximity Sensor leverages data from a smartphone's existing speaker and microphone to emit and receive inaudible ultrasonic waves. It analyzes the reflections of these waves to determine proximity, effectively creating a virtual sensor that is more versatile and cost-effective than its hardware predecessor.

The Strategic Advantage of Software

For original equipment manufacturers (OEMs), the benefits of adopting a software-based solution are manifold. First, it reduces the bill of materials (BOM) by eliminating the cost of the physical sensor. Second, it simplifies the supply chain and removes the sourcing risk associated with a hardware component, which can be subject to shortages or disruptions.

Perhaps most importantly, it grants designers greater freedom. Without the need to accommodate a physical sensor on the phone's face, manufacturers can more easily create the clean, all-screen, bezel-free designs that consumers demand. This flexibility is critical in a market where aesthetic differentiation is key.

This deal is a practical example of a broader trend where artificial intelligence is fundamentally re-engineering devices from the inside out. While many associate AI in smartphones with user-facing features like digital assistants or camera enhancements, its impact on core hardware architecture is becoming equally profound. Elliptic Labs has already deployed its platform on nearly one billion devices worldwide, proving that software-defined sensors are a mature, scalable, and reliable alternative to legacy hardware.

A Win in a Competitive Market

While Elliptic Labs has not disclosed the name of its partner, the reference to a “Top-5 global smartphone customer” places the manufacturer among the industry's elite, a group that includes giants like Samsung, Apple, Xiaomi, Oppo, and Vivo. Elliptic Labs has a documented history of collaboration with major brands such as Xiaomi, HONOR, and Motorola, demonstrating its ability to meet the rigorous demands of high-volume production.

The expansion of this partnership for a multi-year, multi-model rollout underscores the technology's success in the field and its value proposition for the OEM. It represents a significant win for Elliptic Labs against traditional hardware component suppliers and validates its vision of creating smarter, more context-aware devices through its AI Virtual Smart Sensor Platform™. This platform aims to leverage data from every available source on a device, making technology more intuitive and responsive to its environment. As this new agreement rolls out over the coming years, millions of new devices will hit the market with invisible, intelligent software performing a job once reserved for a visible piece of hardware.