With the launch of the iPhone 16 and iPhone 16 Pro, Apple has taken its first steps into the next generation of smartphones, but Tim Cook and his team won’t be able to deliver the benefits to everyone who wants them.
Thanks to the impact of the European Union’s Digital Markets Act, Apple has decided against releasing its generative AI software suite—the clunkily backronymed Apple Intelligence—in Europe. Apple refuses to release the software to its European user base without clear guidance from the regulatory authorities.
Europe has seen steady sales of the iPhone; 56.1 million units in 2021, 56 in 2022, and 56.8 million in 2023. That’s between half and two-thirds of US sales. The loss of the European market to Apple Intelligence will not have an immediate impact; the software will support a minimal set of languages when available, with the first update limited to US English.
Nevertheless, this leaves Apple at a disadvantage.
The likes of Google’s Gemini AI and Samsung’s Galaxy AI can push ahead, gathering mountains of anonymized user data to improve the product as well as offer continual updates for the existing software while working and releasing the second-generation software (as in the case of Gemini AI rolling out with August’s launch of the Pixel 9 family).
Apple can do none of this, at least with its European user base.
Generative AI is one of the current driving forces in smartphone purchasing decisions. A recent survey by CNET suggests that 34 percent of users have privacy concerns around AI. Apple has a strong brand identity that is, in part, built around the promise of privacy, and the company will be leaning into this heavily to try and differentiate its AI against the competition’s AI.
Due to the dominant role that the iPhone and iOS have in the European market, Apple has been labelled as a gatekeeper in part due to the closed ecosystem. As a gatekeeper, Apple must allow third-party companies to work with its services, essentially removing the walled garden around these core services and allowing competition and user choice into the platform.
Apple has previously stated that “…due to the regulatory uncertainties brought about by [the EU’s Digital Markets Act], “we do not believe that we will be able to roll out three of these features—iPhone Mirroring, SharePlay Screen Sharing enhancements, and Apple Intelligence—to our EU users this year.”
Would Apple Intelligence fall under the gatekeeping requirements of the DMA? If so, this would force Apple to open up iOS to work with other generative AI software solutions, giving users the choice of AI software they want to use on their personal devices. Apple is seeking clarity on the interaction between Apple intelligence and the DMA, clarity that has not been forthcoming.
Apple has decided it will avoid the issue by refusing to allow its generative AI software to be installed on a purchased iPhone. It’s a choice that will be seen as a downgrade by Apple’s dedicated community and leave European iPhones at a disadvantage compared to the Android-based competition.
Now read the latest iPhone, AirPods and Apple Watch headlines from Glowtime in this week’s Apple news digest, here on Forbes…
