Apple Inc. made its debut in the artificial intelligence race with the unveiling of the “Apple Intelligence” system at the company’s ‘It’s Glowtime’ event on Sept. 9.
“The next generation of iPhone has been designed for Apple Intelligence from the ground up. It marks the beginning of an exciting new era,” said Apple CEO Tim Cook at a recent Apple event.
Developed in collaboration with industry leader OpenAI, Apple’s AI system had been a long-awaited addition. The initial set of AI features will begin to roll out this fall, which users will gain access to on new and existing Mac, iPad and iPhone devices.
The Silicon Valley tech giant has been slower to implement its own AI system, while competitors like Google and Samsung have already integrated similar features into their products. However, Apple has a track record of refining and popularizing innovations, and many hope that Apple will propel the widespread adoption of AI technology.
The Apple event presented various ways the AI system will improve user interaction. With advanced writing tools, an upgrade to Siri and generative emoji creation, Apple’s AI promises to transform daily communication and streamline various productivity tasks, such as writing emails and organizing schedules.
With the release of the iPhone 16 and iPhone 16 Pro, Apple doubles down on its commitment to its AI. The new iPhones feature AI-enabled A18 bionic chips, a 48-megapixel camera and a new action button, delivering the fastest and most efficient iPhone experience yet. The new models also introduce a camera control system, with an interactive slider that allows for on-the-go camera customization and quick access to other features.
Apple Intelligence will not be limited to the new line of Apple products. Older models such as the iPhone 15 Pro, along with Mac and iPad devices powered by M1 and newer chips, will also be able to access the advanced capabilities of the AI system.
In the most recent fiscal year, iPhone sales generated $200.6 billion, accounting for 52% of Apple’s total revenue – a 2.4% decrease from $205.5 billion the prior year. This decline reflects a consumer trend of holding onto devices for longer periods, likely driven by a lack of groundbreaking features and changes year-over-year. With the implementation of AI, the company aims to reignite the excitement around upgrading to the latest models.
However, skepticism remains high on whether AI features have an impact on consumer buying habits. A study by analyst firm Canalys reveals that only 18% of consumers have a high inclination to buy a smartphone based on its AI capabilities, and only 7% of consumers show an even higher inclination. These numbers suggest that consumers may not yet see AI as a decisive factor in upgrading their devices.
Apple’s AI will be introduced in several phases, prolonging the usual upgrade cycle as consumers wait for additional features and languages to upgrade. The roll out will begin through the iOS 18.1 update in October, with U.S. English being the only supported language at launch. Unlike previous releases, it will take months for the AI to reach its full potential, which could slow down initial sales for the new generation of Apple devices.
Despite these potential delays, analysts remain optimistic that the AI system will foster growth for iPhone sales in the next year.
“Our forecast is for iPhone to grow 10% the next fiscal year,” said managing director and senior software analyst at D.A. Davidson on an episode of Bloomberg the Close.
“That’s still the forecast, whether it’s a little later in the year or a little earlier in the year. That would be the biggest upgrade cycle since iPhone 12.”
