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Apple’s greatest fear is that its exalted iPhone has become too foreseeable. For the most part, it has largely remained the same during the previous seven years, with incremental upgrades to its cameras, CPUs, and battery life.
However, Apple attempted to break free from this predictability on Monday by releasing the first iPhone models designed for artificial intelligence from the “ground up,” a phrase that CEO Tim Cook used in his opening remarks.
Consistent with its prior virtual product launches that spawned during the Covid era, the company hosted a prerecorded video from its Silicon Valley headquarters to unveil the iPhone 16, available in four variants optimized for Apple Intelligence, the company’s generative AI-powered system. According to Apple, the phones will have enhanced capabilities such as message sorting, recommendation writing, and an upgraded Siri, making it a more powerful virtual assistant.
The firm also revealed the Apple Watch Series 10, which features a larger, brighter display about 10% slimmer than its Series 9 predecessor. Apple also unveiled a new model, AirPods Pro, which can function as a professional-grade hearing aid — Apple’s first foray into that area — and automatically reduce noise at concerts or near construction sites.
Betting on AI to Boost Sluggish iPhone Sales
The release of the new phones is critical for Apple, as sales have been sluggish since 2021. The last time the company saw meaningful iPhone year-over-year growth in unit sales was largely due to the introduction of 5G.
Apple has struggled recently because iPhone owners have held onto their phones longer. By reorganizing its engineering teams to focus on artificial intelligence, it has placed a significant wager that the technology capable of producing images, writing software, and responding to queries will convince consumers to purchase new gadgets.
With these announcements, Apple is attempting to play a significant role in bringing AI to the masses. Although Microsoft, Google, and Samsung have added generative AI features to products, these features have not yet been broadly utilized. However, as demonstrated by digital music players, smartphones, and smartwatches, Apple has shown in the past that it is willing to wait to adopt and promote developing technologies.
The Gen AI Kool-Aid Factor
Although AI is the current buzzword with many consumers, the jury is still out on whether most mainstream users will drink the Apple Intelligence Kool-Aid and move to upgrade their current iPhones.
Google, Microsoft, and OpenAI have showcased impressive demos over several months. Still, it remains unclear whether AI’s benefits will motivate users to upgrade their iPhones or remain a “bright, shiny object” by skeptical consumers.
Viewed in that vein, when one compares Apple Intelligence to what the company advertised in June when it unveiled the technology, the iPhone 16 has fewer features at launch.
Starting next month, users will be able to find photos more quickly by describing an image to Siri, receive summarized notifications, and get writing tips from their phones. Additionally, thanks to artificial intelligence, the camera will recognize specific types of plants, flowers, or dog breeds.
Will Consumers Trade Privacy for AI Convenience?
Of course, all of these benefits require mainstream users to grant access to an unprecedented level of personal information on their smartphones, and it’s still unclear whether they are prepared to make these privacy concessions in return for thoroughly enjoying the benefits that AI offers.
Other features will be added gradually. For example, Siri can handle phone requests involving personal information, such as extracting flight information from a family member’s text message and contacting the airline to find arrival details in real time.
Requests not involving personal data will be sent to ChatGPT, accessible on iPhones following Apple’s partnership with OpenAI in the spring.
Apple’s Cautious Approach to Generative AI
The iPhone’s constrained feature set reflects Apple’s conservative approach to generative AI compared to its competitors.
In contrast, Google unveiled the Pixel phone last month, featuring a conversational virtual assistant, the capability to edit users into photos, and the capacity to ask complicated questions using the company’s generative AI chatbot, Gemini.
Google has also seen AI blunders, such as a chatbot that produced laughable (and sometimes disturbing) results.
New iPhones 16 Models Feature Modest Updates
Apple launched the iPhone 16 in four variants, each featuring a redesigned camera button.
The entry-level devices, the iPhone 16 and 16 Plus, have a more powerful camera, a quicker processor, and a physical “Action” button that users can set to access features like the phone’s flashlight immediately.
The iPhone 16 Pro and Pro Max are the more expensive models, starting at $999 and $1,199, respectively. They have slightly larger displays, a bigger battery, and the capacity to record audio at studio quality. That latter feature will undoubtedly reinforce the iPhone Pro brand as the go-to device for users with computational video and photography applications.
The Pro line phones have identical processors that power Apple Intelligence. The A18 chip is used in the standard iPhone 16, whereas the A18 Pro processor is in the iPhone 16 Pro. Compared to previous years, the upgrade results in a less noticeable difference between the capabilities of the more expensive and less expensive phones.
Apple’s International Challenges
Apple faces additional difficulties as the world enters the generative AI era. For most of the 17 years that the iPhone has existed, the company created a single software system that it updated globally. However, more countries require that the data and computer systems underpinning artificial intelligence be housed inside their borders.
It’s logical to assume that AI systems will, over time, ultimately recognize users’ linguistic and cultural variations. This development, in turn, may require Apple to develop more specialized software for the nations where iPhones are sold.
This implication represents an enormous software complexity undertaking, which the company may have to prepare itself for from a resources standpoint.
During the launch event, Apple pointed out that a preliminary software upgrade for Apple Intelligence will be available in the United States starting next month. Later this year, Apple plans to widen the rollout of Apple Intelligence to English-speaking countries in Europe, the Pacific Rim, and South Africa, leaving most countries without Apple Intelligence until next year.
The Untested Future of Apple Intelligence
Apple Intelligence offers significant improvements in user experience through innovative AI-driven features, personalized interfaces, and enhanced privacy, but its impact on fueling iPhone sales remains a nuanced question.
These innovations may provide a compelling reason to upgrade for tech enthusiasts and users deeply invested in the Apple ecosystem. However, for more price-sensitive or casual consumers, the incremental nature of these enhancements — especially in a saturated smartphone market — may not be enough to drive widespread sales growth.
Ultimately, Apple’s ability to maintain strong iPhone sales will depend on the allure of its cutting-edge AI features and broader market factors such as pricing strategy, economic conditions, and competition from rivals like Samsung and Google.
The jury is still out on whether consumers will take the gen-AI bait — though Apple’s renowned messaging and brand strength may give it a reasonable shot.
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