Tim Cook and his team will launch the iPhone 16 and iPhone 16 Pro smartphones next month, and Apple will finally offer a modern suite of AI tools to its faithful followers. But will Apple’s decision to rely on Apple Intelligence be rewarded?
During Apple’s recent quarterly earnings call, it was noted that iPhone sales had made up a smaller percentage of the company’s total sales over the last four years. For the third quarter, sales dropped from $39.67 billion in 2023 to $39.30 billion in 2024.
There was one topic on the call that Cook heavily pushed: generative AI. The awkwardly named Apple Intelligence was announced in June at the Worldwide Developer Conference, with the first implementations now available in the iOS developer beta, ahead of the public release alongside the iPhone 16 and iPhone 16 Pro in September.
Apart from last year’s iPhone 15 Pro and 15 Pro Max, any iPhone user who wants to experience an AI smartphone and remain inside Apple’s ecosystem will have to buy a new iPhone due to the high specifications needed to run the software. Apple’s assumption must be that the iPhone 16 family will unlock the demand for AI, and a cascade of sales will follow.
Yet, Apple’s decisions regarding the implementation and the immediate need for AI may not be enough to lift the iPhone 16 out of its slump.
Apple is arriving late to the generative AI party. Two weeks after the iPhone 15 family went on sale, Google debuted the Pixel 8 and Pixel 8 Pro. These were the first AI smartphones to be launched, and Google’s selection of AI tools became the base level of expectations. With Samsung rapidly following thanks to Galaxy AI, backed up by Qualcomm’s move to include AI in the Snapdragon specifications and other manufacturers’ adoption of its AI vision, Google had successfully defined the generative AI approach for 2024’s smartphones.
Next week, Google will reveal the Pixel 9 family and the next generation of AI tools. That’s a full month ahead of the iPhone 16 launch. Apple’s iOS will be two major versions behind Android OS when Apple Intelligence finally arrives.
Neither will Apple Intelligence arrive with the iPhone 16. It is scheduled to be included in an iOS update in October 2024. When the moment comes, its capabilities will be limited. Apple will not release the full set of tools to consumers until the first quarter of 2025 at the earliest. Not only will Google have powered ahead thanks to the Pixel 9’s near six-month advantage, but Samsung’s Galaxy AI will also have its own annual upgrade alongside the Galaxy S25 family.
The competition will be years ahead of Apple, Apple Intelligence will be severely limited when it launches, and anyone thirsty for AI will have already moved to a more capable platform.
iPhone sales figures are not going to collapse. Yet continuing with the same sales volume as the last few years is not something Apple wants to see. Tim Cook has been unnaturally vocal about how AI will be a “super-feature” that will unlock sales due to the pent-up demand… assuming Apple can overcome the self-imposed hurdles it has placed on the road to success.
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