Apple Inc.’s unveiling of the iPhone 16 with its signature AI system, Apple Intelligence, could be the catalyst for mainstream adoption.
The new iPhone lineup, powered by the A18 and A18 Pro chips that are 15% to 40% faster than iPhone 17 models to accommodate the demands of generative-AI, delivers an energy-efficient option that is heavy on privacy protections, the company said. The phone comes with writing tools deeply integrated into the iOS to polish correspondence, create new emojis through texts and pinpoint photos with just a few type-written words. Siri gets a fresh update as well.
The iPhone 16 ($799), iPhone 16 Plus ($899), iPhone 16 Pro ($999), and iPhone 16 Pro Max ($1,199) come with a camera control button on their sides that doubles as a visual intelligence feature to find out more about new surroundings, such as a new restaurant or breed of dog by simply pointing the camera at the object. Each model includes battery boosts.
The phones can be ordered Friday, and will be available Sept. 20.
“Apple Intelligence will supercharge these experiences,” Apple Chief Executive Tim Cook said at a press conference in Cupertino, Calif. “It marks the beginning of an exciting new era.”
With Dell Inc. executives already predicting a “super cycle” to roust a dormant PC industry, the entry of Apple is likely to translate to the most-successful iPhone launch in several years.
“We estimate that roughly 20% of consumers worldwide will ultimately access and interact with generative AI apps through the Apple ecosystem over the coming years which all kicks off with iPhone 16 this week,” Wedbush Securities analyst Dan Ives said in a note to investors on Sunday.
Ives believes initial iPhone 16 shipments will top 90 million, compared with original street expectations of 80 million to 84 million.
Sales of iPhone have largely been stagnant since the launch of the iPhone 12 with 5G connectivity in 2020. About 300 million iPhones worldwide have not been upgraded in more than four years, Ives said in another research note.
The prospects of a breakout new iPhone, coupled with a slew of GenAI-ready personal computers, have prompted hopes of juiced AI hardware revenue.
Dell, Samsung Electronics, Lenovo, Acer and ASUSTeK Computer have introduced Copilot+ computers in recent months, prompting hopes of rejuvenated PC sales to the business sector to reverse a steady decline since the pandemic.
The new iPhone 16 line is likely to give a much-needed kick to Apple shares, which have improved 15% in 2024, and the product portfolio. Sales of iPhones make up half of the company’s revenue.
Still, some analysts noted the melding of genAI into Apple’s ecosystem will occur in a phased manner over the next few years, leaving it far behind rivals. “Google will race ahead taking its Gemini AI models to 200 million Android devices by the end of 2024,” Anisha Bhatia, senior technology analyst at GlobalData, said.
“With lots of words like ‘later this year’ and ‘early next year,’ the core Apple message for iPhone 16 was: Next year will be better,” Needham analyst Laura Martin said in a note.
Apple shares were flat in trading Monday.
