Apple Intelligence Launch: Mixed Expectations for iPhone 16 Sales Impact

Apple Intelligence Early Review: Don't Expect Your iPhone to Feel Radically Different

Expertise Apple | Samsung | Google | Smartphones | Smartwatches | Wearables | Fitness trackers One of my favorite things about the iPhone 16 isn't its new Camera Control button or macro photography mode. Instead, what I've come to appreciate most is that I can look down at my phone after getting a barrage of texts or Slack messages and know whether it's an emergency just from the lock screen. Of all the features available in Apple Intelligence at launch as part of Apple's iOS 18.1 update, message and notification summaries are by far the most useful. The summaries aren't perfect (AI, as it turns out, can't nail sarcasm and doesn't know the inside jokes I share with my friends). But this type of functionality is exactly the type of passive, practical intelligence I'm hoping to see more of on smartphones in the future. Otherwise, the first wave of Apple Intelligence, which I've been testing in a beta ahead of iOS 18.1's official launch, are mostly geared toward specific tasks such as editing a photo or writing an email. It's worth noting the version I've been using is a preview meant for developers rather than the publicly available build, so functionality will likely improve over time. Still, my experience is enough to give me a sense of the role these AI tools may or may not play in our everyday lives. Many of Apple's features address similar scenarios and use cases as Android-based AI tools that have emerged over the last year, like Samsung's Galaxy AI and Google's Pixel AI features. Arguably, the more exciting Apple Intelligence additions will be coming in a future iOS 18.2 update, which just arrived in developer beta last week. That upgrade will bring ChatGPT integration, Visual Intelligence for scanning the world around you with your iPhone 16's camera and image generation tools like Image Playground and Genmoji among other additions. It's impossible to tell exactly how much Apple Intelligence brings to the iPhone experience based on this first set of features. But so far, I've found a few instances in which it's been meaningfully helpful -- such as text message summaries -- and that provide a glimpse into how our iPhones will get more intelligent in the future. But other features, like the ability to rewrite text, I can see being easily forgotten. Apple Intelligence is beginning to roll out for the iPhone 16 lineup, iPhone 16 Pro and iPhone 15 Pro with iOS 18.1. It'll also be available for compatible Mac and iPad models, although I've only been testing it on an iPhone 16. Read more: I've Been Using the iPhone 16 for a Month. Here's What Stands Out I'm grateful Apple is trying to solve one of the most annoying problems with our phones: being inundated with notifications. Apple Intelligence summarizes incoming texts and alerts, which in my experience has been accurate enough to get the general gist of a conversation at a glance. For example, I've found it useful for seeing that my friends decided on dinner plans on a Friday night or knowing whether my editor will be available to edit a story. The same goes for notifications from messaging apps like Discord, Slack, Google Chat and WhatsApp, which certainly comes in handy when messages from my large group chats start to pile up. If you send a photo, Apple Intelligence will usually include a description of the image, although in my experience that wasn't always the case. I found these summaries to be more useful than the email summaries in the Mail app, considering the preview section that shows up in your email is too small to show a meaningful summary of a lengthy email. But you'll definitely want to open the notifications to get the full picture. Apple Intelligence can sum up simple messages pretty well. But how many of your conversations with friends and family are actually straightforward? Most of the time, chats are infused with inside jokes, sarcasm and references that only humans, specifically the humans you talk to regularly, will understand. And that certainly shows in Apple Intelligence. Look at this example of how Apple Intelligence summarized a conversation in Google Chat to see what I mean. The conversation was about friends that couldn't make it to another friend's birthday dinner because of a relative's party that same weekend. Some friends made jokes about what to wear to the friend's birthday party throughout the conversation. Otherwise, I noticed that Apple Intelligence will exclude certain details from message summaries, so I certainly wouldn't recommend relying on them too much. It's also worth noting that in my experience, Apple Intelligence will not summarize messages that include explicit or sensitive content, such as texts that include references to self harm. Message summaries are far from perfect, and they're often too clinical to capture the conversation. But I do think it's the best example so far of how Apple Intelligence can be useful in a way that feels natural and practical. One of my biggest criticisms about new AI tools in general is that they require the user to think of a prompt or go out of their way to take advantage of these features. I'm a fan of passive features, like message summaries, that are infused into the operating system and don't require a user's effort. It's one of the few Apple Intelligence features I might actually miss if I were to switch back to an iPhone 15. A lot of these AI features involve handling personal information, which is why Apple uses a system called Private Cloud Compute. Apple says it analyzes whether a request can be executed on the device or if it requires more powerful cloud-based computing. If it does need the cloud, Apple says it will only share the information required to complete the task, which Apple doesn't store and can't access. Read more: Your Phone's Virtual Assistant Is About to Change in a Big Way Like Google and Samsung, Apple makes it possible to remove pesky background objects from photos. Its new tool called Clean Up allows you to circle unwanted elements in an image to remove them. What stood out to me the most is the way Apple highlights objects it thinks you'll want to delete, which I've found to be accurate. When editing a photo of me sitting on a bench sipping an iced matcha drink, for example, Apple highlighted my colleague's backpack and beverage. Like similar tools from Google and Samsung, the edits are pretty seamless when removing small objects but can sometimes make the photo look warped when removing bigger items. The results can vary, so if you're unhappy with the outcome it's a good idea to try again. Look at the photo below to see what I mean. Can you tell where the backpack was in the photo? Apple's approach to image alteration is more reserved than Google's. On Pixel phones, you can add objects to photos that weren't there and swap facial expressions between images. Apple's features are more focused on object removal. One of the other new Apple Intelligence features coming to the Photos app is the ability to create custom memory montages based on a prompt. The idea is that you'd be able to type in any phrase that describes photos in your library, like "Graysen learning to walk" for example, and the iPhone will do its best to compile a movie of images that fit that theme. This was hit-or-miss in my experience. For some prompts, like images of landmarks, it worked well. But in other instances, I had to try multiple times to get the result I wanted, and even then it wasn't exactly right. When I typed in "best things I ate in Italy," it pulled up a ton of photos that didn't include food. The same goes for general search in the Photos app, which gets a boost from Apple Intelligence so that you can use natural language to search for a specific image. Like the memory movies, the results were inconsistent. Typing in a search term like "Oscar being cuddly" worked well and resulted in dozens of images of my cat laying in my lap. But others, like "Me and Courtney at dinner," only pulled up a fraction of the photos in my library. Siri's bigger upgrade that introduces ChatGPT integration and the ability to draw on personal context will be coming in future updates. But in iOS 18.1, Siri gets a more modern look that consists of a glowing border that wraps around the screen, better comprehension when you stumble over your words, product knowledge for answering questions about your iPhone and support for typed queries. These upgrades don't feel overwhelmingly new, but they do make Siri feel a bit more convenient than before. I tried to stump Siri on multiple occasions with "umms" and "actuallys," and sure enough Apple's virtual helper was able to understand the intention behind my request. When I asked a question about what the most popular movie Jennifer Garner was in but changed it to Jennifer Lawrence mid-sentence, Siri correctly mentioned films in the "X-Men" and "Hunger Games" series. Similarly, Siri was able to set an alarm even though I initially asked it to set a timer by mistake. I don't think an update like this will encourage you to use Siri more often if you don't already do so. But it should make Siri interactions a bit more smooth for the things that you do use it for. Read more: iPhone 17 'Slim' Rumors: Apple's Thinnest Phone Ever May Come Next Year Productivity is also a major theme in Apple Intelligence. You can have Apple rewrite, proofread and summarize text throughout the operating system, meaning you can use it whether you're writing an email, text message or note. Just highlight the text you want to work with and you'll see an option called Writing Tools along with the usual options for copy and paste. Samsung offers similar features on its phones. I tested this tool to rewrite text messages in a different tone. Apple provides options for making writing more concise, friendly or professional or to just rewrite the text in general. I chose the friendly option and found that Apple generally did a good job of keeping the same general tone, more so than Samsung. Apple rephrased a few portions to sound more friendly, such as saying "How's life treating you?" instead of "How's everything going?," while Samsung significantly shortened my message and added the word, "Yo," which I never use. I don't find myself going out of my way to use Writing Tools often. It's not because they don't work well, but rather because like many AI features, it requires building a new habit. Maybe it's because I'm a writer, but I'm used to proofreading and re-phrasing my own messages and emails before sending them. However, there's definitely a practical use case, especially for those who have a hard time constructing complex professional emails from their phones. Otherwise, there are a handful of features to help you feel more organized, particularly in the Mail app, which can now highlight priority emails. I like this in theory, but I found that it only highlighted emails from my credit card company, which felt a little unbalanced. I wished it highlighted other timely emails, like my Amazon shipment notifications and Venmo transactions. On one or two occasions, it surfaced an email thread with friends about a weekend trip to Maine, but it didn't highlight this email every time someone responded. Overall, priority email groupings have potential but don't feel useful yet. With iOS 18.1, it's clear that Apple Intelligence is in its early stages. That's not necessarily a bad thing; it just means you shouldn't expect your iPhone to feel radically different after this update. There's a lot of potential in features like message and notification summaries and photo memories, both of which aim to solve the very real pain point of sorting through the massive amounts of alerts, messages and photos found on our devices. These features don't always work as intended, but they point towards a promising future. But the most intriguing stuff is yet to come. I expect Apple's iOS 18.2 update to provide a much clearer picture about what Apple Intelligence will bring to the iPhone. So is it worth buying a new iPhone for Apple Intelligence? No, at least not yet. But it does make me believe iOS updates and software support will become a more important part of the iPhone upgrade decision in the future. Just how far into the future isn't clear yet.

Apple Intelligence is ready to launch -- does that mean it's time to get an iPhone 16?

iOS 18.1 arrives this coming week, officially launching the initial Apple Intelligence features on devices capable of supporting the suite of AI-powered tools. So naturally, that's going to spark a lot of iPhone 16 upgrades, since the models Apple released this fall are the only iPhones outside of the iPhone 15 Pro and iPhone 15 Pro Max that will be able to run the new capabilities. Right? Not exactly. "Some analysts have even made dubious claims that Apple Intelligence is already creating an 'AI consumer revolution' that will 'spark a massive holiday season,'" Bloomberg's Mark Gurman wrote in a recent column noting that Apple's AI efforts are about two years behind the competition. "But Apple's AI glory is still years away. If the new iPhone is a hit this year, it will probably be because of everything but AI." Analyst Ming-Chi Kuo is similarly pessimistic about an Apple Intelligence-inspired sales boom, citing recent production cuts that mostly affect the non-iPhone 16 Pro models. "I believe that Apple is best positioned to succeed in on-device AI, and I am confident about the long-term potential for Apple Intelligence to become a popular paid service," Kuo wrote in a blog post on Medium. "However, significant growth in iPhone shipments will likely require further hardware innovation to accompany this AI development." That may not be the Apple Intelligence launch people had been dreaming of, particularly those employed at Apple HQ. But it's not entirely surprising given that iOS 18.1 is just the first step in an Apple Intelligence rollout process expected to last well into next year. "Apple has made Apple Intelligence a key part of its marketing and advertising for the iPhone 16 so there ought to be some impact on sales when it arrives," said Techsponential's Avi Greengart when I asked him if it was likely that Apple Intelligence's launch would bring a spike in iPhone 16 sales. "But there are many definitions of 'when Apple Intelligence arrives.'" What iOS 18.1 delivers Apple took the unusual step of releasing an iOS 18.1 beta before iOS 18's official launch, with the idea of getting Apple Intelligence features in the hands of developers as quickly as possible. A public beta followed in September shortly after the iOS 18 update arrived. You won't find every Apple Intelligence feature in iOS 18.1. The update includes Writing Tools that work in any app where there's keyboard input, including third-party offerings. You can use writing tools to get proofreading suggestions, try out different tones or make text more concise. You can also select text to get summaries, with summary features also added to Safari, Mail and the Notes app, where you go to summarize the transcripts of audio clips and phone call transcripts. Mail sees other Apple Intelligence-influenced changes in the form of smart replies to messages and a priority inbox feature that surfaces messages with deadlines to top of your inbox. Instead of showing the first few sentences of a message, your inbox now displays a two line summary. Notifications are supposed to be summarized, too, though in my experience of using iOS 18.1 since September, that particular feature hasn't shown up all that much. Photos is probably the biggest beneficiary of Apple Intelligence, as you can now use natural language search to find photos and videos in your library. (This feature also seems to work to some extent in phones running the iOS 18.1 beta that don't necessarily support Apple Intelligence like my iPhone 12.) Using text prompts, you can create a Memory Movie slideshow of photos and videos from your library, and a Clean Up tool mimics Google's Magic Eraser feature by letting you remove unwanted objects from photos with a tap. Siri also gets the first changes in what figures to be a complete overhaul as part of Apple Intelligence. The entire screen now flashes when you summon Siri, and you can interrupt the assistant or even correct yourself mid-request. Siri has a more extensive understanding of Apple products, making it a good troubleshooting resource. There's a type-to-Siri feature in Apple Intelligence, too. All of those are improvements, some of them further along then others. But they're not exactly reinventing what the iPhone as to offer. "Even these Apple Intelligence capabilities feel like improvements to existing features spread out throughout the OS and don't fundamentally change how you use your phone," Greengart said. That's certainly my impression after using iOS 18.1. There are some features that are extremely well-implemented like the writing tool that can turn your text into more formal writing -- great for perfecting cover letters. But other tools feel like they're going to need more refinement over time. There's certainly in this initial burst of Apple Intelligence features that's reason enough to upgrade your phone. What this means for the iPhone 16 But that's not a criticism of the iPhone 16 lineup, which offers plenty of upgrade incentives without taking Apple Intelligence into consideration. For starters, the iPhone 16 gets its share of premium features like the Camera Control button and a new A18 chipset so that no longer feels like an afterthought to the Pro models. All the iPhone 16 models last a long time on a charge, and the camera improvements on the iPhone 16 Pro and iPhone 16 Pro Max keep Apple's handsets top when it comes to the best camera phones. So in that context, Apple Intelligence is more like a nice add-on to all the changes Apple has made to its iPhone lineup rather than the sole driver of upgrades. That assessment lines up with IDC's forecast for iPhone sales during the holiday quarter closing out 2024. "We expect a fairly healthy growth for Apple in Q4 driven by upgraders who have reached the end of their typical 3 to 4 year lifecycle, aka those that are currently on older iPhone models like 13, 12 or older," said Nabila Popal, IDC's senior research director. "The growth from Apple Intelligence will come next year, with almost 5% YoY growth forecasted for Apple in 2025," she added. "We expect consumer awareness around Apple Intelligence to grow, use cases to increase and additional language support to roll out by then." What's next for Apple Intelligence With iOS 18.1 landing on phones in the coming week, attention is inevitably turning to iOS 18.2, which is already out as a beta for developers. Expect a public beta to follow soon enough. iOS 18.2 brings more Apple Intelligence features to the table including one that's exclusive to the iPhone 16 -- Visual Intelligence. This Google Lens-like feature lets you point your iPhone camera at something to extract information. Examples Apple cited when previewing the feature in September included identify dog breeds and pulling down event information from a concert poster. Other iOS 18.2 additions include Image Playground, Apple's stab at using generative AI to create images. That includes the long-awaited Genmoji feature where you can custom create emoji using text prompts. ChatGPT will be integrated into Siri responses, too, as Apple continues to fine-tune its digital assistant. Those will be good additions to the iPhone experience, and I certainly look forward to trying them. But like the iOS 18.1 additions hitting phones right now, they're unlikely to cause that iPhone 16 spike that some are hoping for. So what will? Techsponential's Greengart thinks Apple's most immediate challenge is to "show that even the limited version of Apple Intelligence shipping in today's software can do useful and interesting things that you could not do before. I suspect that message and email summaries are the most obvious changes." As for the longer term, "Apple needs to capitalize on its privacy and cross-app ability to take actions on your behalf before rivals with better performing AI models find a way to harness (and monetize) their technology and reduce Apple's ecosystem advantages," Greengart said. IDC's Popal sees Siri as the key. "For me, and I suspect for more users, the most exciting use case will be when Siri can function as a 'human like' digital assistant that can perform multiple tasks for you and is able to converse with the user in a more 'human'-like manner," she said. "This is the direction I believe Apple will focus on in the coming year(s) to motivate consumers to upgrade early. " More from Tom's Guide

Apple Intelligence Isn't Driving iPhone 16 Sales the Way Apple Hoped, Analyst Says

An analyst claims Apple cut production for 10 million iPhone 16 units, despite Apple Intelligence's full launch next year. The baseline iPhone 16 is already the most capable Apple non-Pro smartphone ever. It has all the same extra buttons, like Camera Capture and the Action Button, that the iPhone 16 Pro has. It can capture spatial pictures and video, and eventually, it’s getting all the newfangled Apple Intelligence features. Despite that, a noted supply chain analyst is reporting the company is cutting iPhone production just two months after launch as people aren’t really too keen on the promise of an AI-ified iPhone. Market analyst Ming-Chi Kuo from KGI Securities wrote on his Medium blog Wednesday that Apple cut orders for about 10 million baseline iPhones for the tail end of this year and into 2025. Previously, Kuo estimated shipments of around 84 million for the tail end of this year, but that’s now down to an estimated 80 million. Apple is also expected to make fewer iPhone 16s in the first two quarters of 2025. That’s still a lot of iPhones, but when Apple has been dealing with declining iPhone sales for over a year, it’s not great news for the Cupertino tech giant. Kuo mentioned that the decline in production might not show on Apple’s Q4 financial statements due to the gap in production versus sales. Still, there may be a decline in shipments and phone revenue year over year once we get into 2025. Apple isn’t expected to decrease the number of iPhone 16 Pro models, with their better displays and camera setups plus the more powerful A18 Pro processor. iPhone sales were also down last year, despite the promise that the iPhone 15 Pro would be the first phone to facilitate Apple Intelligence. Kuo said he did not assume Apple’s AI features would increase iPhone sales. Apple released its new phone alongside iOS 18. However, users have to wait until Oct. 28 to get the first few AI features like Writing Tools outside of beta. They’ll have to wait longer for iOS 18.2 for any AI image generation. The fabled Siri overhaul, which will supposedly let the assistant access users’ data across their devices, won’t arrive until sometime next year, according to inside sources cited by Bloomberg’s Mark Gurman. Even if Apple Intelligence has the chance to boost sales, the market analyst remains skeptical, writing, “Apple’s recent order cuts suggest this optimistic expectation may not materialize in the short term.†There’s a chance iPhone buyers are waiting until the iPhone 17 to upgrade. By then, we’ll have already seen the outcome of Apple Intelligence and know whether it's worth using. That, or Apple fans aren’t seeing anything truly exciting or revolutionary about the last few yearly smartphone releases. Apple has reportedly scaled back production of its other big bet, the $3,500 Vision Pro. According to anonymous sources on the production line cited by The Information, Apple capped production at between 500,000 and 600,000 headsets. That will apparently be enough to meet demand. The iPhone maker may start winding down Vision Pro production in November. This comes just a few days after a Wall Street Journal interview with CEO Tim Cook, who proclaimed how they plan to be “the best†in AI features across iPhone, iPad, and Mac. Cook also said he’d “always like to sell more of everything,†including the company’s first “spatial computer.†Still, he admitted, “At $3,500, it’s not a mass-market product.†There’s a chance that iPhone sales could be boosted by the rumored iPhone SE 4, with Apple Intelligence support reportedly slated to launch early next year. Now we have an AI-capable iPad mini plus the promise of a new iPad 11 that could support AI in 2025, according to Gurman’s sources. Tim Cook’s company is set to release even more AI-capable products with a lineup of MacBook Pros, Mac minis, and iMacs with M4 chips, reportedly slated for launch by the end of October or early November.

Apple Previews New AI Features, With Some Set to Roll Out to the Public Next Week

However, industry supply chain analyst Ming-Chi Kuo said Wednesday the company cut orders for the iPhone 16 by about 10 million units, and warned growth in iPhone shipments could require further hardware innovation. Apple (AAPL) on Wednesday released its next set of artificial intelligence (AI) features with iOS 18.2 for beta-testing by developers, with some new Apple Intelligence features set to be released publicly in the iOS 18.1 update next week. The iOS 18.1 features are coming to the new lineup of iPhone 16s, along with the 15 Pro, the 15 Pro Max, and certain iPads and Macs. This iteration of Apple intelligence supports only U.S. English. Features reportedly include text revision, proofreading, new photo editing capabilities and a feature that consolidates multiple notifications from the same app rather than showing them individually. The 18.2 beta for developers also reportedly includes other features Apple showcased at this summer's Worldwide Developers Conference like integrations with ChatGPT from OpenAI, along with Genmoji, the custom emoji creator, and Image Playground, Apple's competitor to other AI image generators. Apple SVP of software engineering Craig Federighi told the Wall Street Journal in an interview Wednesday that Apple is releasing features slowly in an effort not to stumble. "You could put something out there and have it be sort of a mess. Apple's point of view is more like, 'Let's try to get each piece right and release it when it's ready,'" said Federighi. Analysts have previously suggested Apple's AI features could help drive sales of Apple's iPhones, despite a slow start to sales of the iPhone 16, which launched without Apple's latest AI features. However, industry supply chain analyst Ming-Chi Kuo warned Wednesday that "significant growth in iPhone shipments will likely require further hardware innovation to accompany this AI development." Kuo said the company cut orders for the iPhone 16 by about 10 million units, specifically the regular iPhone 16 as opposed to the iPhone 16 Pro models featuring higher-end displays and cameras. Kuo projected iPhone revenues could come under pressure in the first half of 2025, as shipments decline. Apple shares fell about 2.2% Wednesday as it was also announced that regulators fined Apple and Goldman Sachs (GS) more than $89 million over Apple Card issues.

Apple Intelligence won't boost iPhone sales, analysts say

Apple Intelligence, as the suite of features are known, are the Cupertino, California-based company's first and highly-anticipated foray into AI. But a delayed rollout and a global slowdown in smartphone sales for the quarter put a damper on hopes that the iPhone maker could see an uptick in upgrades. The tech giant could add Apple Intelligence to iPhones -- specifically iPhone 15 Pro models or newer -- on Oct. 28, in a software update that will give users their first look at what Apple's version of AI will be capable of. But Analysts at Jefferies (JEF-1.20%) warned in a research note published Sunday that this likely won't give iPhone sales a boost. Read more: Apple is losing to Huawei in China. Here's why Jefferies said the upgrades, which will include limited hardware capabilities and a relatively small AI model, "are not significant enough" to improve iPhone sales. The research firm expects an incremental rollout of Apple Intelligence features in subsequent software updates over the next six months, with a big step up in AI capabilities on the iPhone likely not on the horizon until 2026. Sales for the new slate of iPhones largely disappointed, growing just 1% year-over-year for the current quarter, according to Jefferies' note citing market research data from Counterpoint. That's including the fact that iPhone 16 deliveries began two days earlier than last year. Overall, global smartphone sales rose just 2% in the quarter, down from 6% growth in the second quarter of the year. Paired with rising costs for hardware related to AI, Jefferies said it is expecting overall downward pressure on smartphone deliveries and sales to continue through the end of this year. While analysts initially touted the growth opportunities and the potential for an upgrade "super cycle" for Apple, recent research shows that a minority of consumers buy a new iPhone because of new features. Most only opt to upgrade their smartphones once they become obsolete, or are stolen or damaged. The company, too, was hoping Apple Intelligence would help drive sales. It reported sales of almost $86 billion for the quarter ended June 29, up 5% from a year earlier and topping Wall Street estimates. But the company continues to face growing competition in China, including from homegrown smartphone maker Huawei, which has continued to be a drag on its sales.

Is Apple Late to the A.I. Party?

"When you have over two billion iOS devices, you can afford to be late," Wedbush analyst Dan Ives told Observer. Despite launching with much fanfare, Apple (AAPL)'s newest iPhone 16 lineup and its touting of A.I. features, dubbed "Apple Intelligence," have not quite lived up to expectations, raising concerns that the world's most valuable company might be truly late to the A.I. game. However, Wall Street analysts are bullish on Apple's broader prospect, citing the iPhone maker's dominance in consumer devices. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters "They were late [to the A.I. race], but when you have over two billion iOS devices, you can afford to be late," Dan Ives, a prominent tech analyst at Wedbush Securities, told Observer in an interview. "For Apple, it's not about being early or late -- it's about being right." This view echoed what Apple CEO Tim Cook recently told The Wall Street Journal about his A.I. strategy, which can be summarized into four words: not first, but best. Apple Intelligence promises to deliver A.I.-powered features across iPhones, iPads and Mac computers. Next week (Oct. 28), Apple is set to release a beta version of it to devices installed with iOS 18.1. Customers expect it will revolutionize user experience by offering A.I.-enhanced match and writing assistants, improved Siri, and customizable emojis. Apple will, in Ives' words, "own the consumer A.I. revolution." Ming-Chi Kuo, a renowned Apple analyst at TF International Securities, noticed that demand for the iPhone 16 base models remains "lackluster" compared to last year's iPhone 15 lineup, he said in an X post on Oct. 9. Based on component demand data, Kuo predicts that iPhone sales during this year's holiday quarter will decline slightly from last year. However, Ives argues next week's Apple Intelligence beta release will create an A.I.-driven "supercycle" that could reignite demand in the December quarter. "Many skeptics have missed this -- Apple has an unparalleled ecosystem," he said, noting that there are 1.5 billion iPhones in use globally, of which 300 million are currently due for an upgrade, according to Wedbush data. Apple shares currently trade at $236, up 27 percent this year so far. "I think the A.I. story alone could be worth $30 to $40 per share," Ives said, adding that he forecasts "20 percent of the world will access A.I. through an Apple device through the coming years." One of the key markets to watch is China, where Apple has struggled over the past year due to increasing competition from domestic brands like Huawei and a general economic slowdown. Yet, Ives forecasts a "renaissance of growth" for Apple in the region and expects up to 15 percent growth over the next year. JPMorgan analysts echoed this sentiment, recently affirming their overweight rating on Apple, citing "resilience" in demand for the iPhone 16 Pro models and a "strong upgrade cycle" in the U.S. Pro models have historically been popular among Apple customers, with the iPhone 15 Pro Max and Pro models making up 45 percent of iPhone sales this spring, and the standard iPhone 15 making up just 14 percent. Evercore's analysts added that Apple is poised to outperform amid "lowered expectations," maintaining a $250 price target for the stock. Apple is set to report earnings for the June-September quarter on Oct. 31.

Apple Intelligence unlikely to boost iPhone sales: Jefferies By Investing.com

Investing.com -- Jefferies analysts expressed skepticism about Apple's upcoming Apple Intelligence feature, suggesting it will not significantly boost iPhone 16 sales. Apple is expected to launch the feature with iOS 18.1 on October 28, but "the features are not significant enough... to drive better iPhone 16 sales," said Jefferies. The analysts attribute this to hardware limitations and the small size of Apple's AI model, which only utilizes 3 billion data parameters. They expect Apple to introduce incremental AI upgrades in future updates through iOS 18.2 to 18.4 over the next six months. Apple aims to roll out iOS 18.1 with AI in additional English-speaking countries by December, with further expansion into non-English markets planned for 2025. Jefferies believes that Apple Intelligence is still in its early stages and predicts more substantial developments won't materialize until 2026. " AI on device is still early days, and will only see a step-up in 2026 for iPhone (Android will be even later) as the hardware tech is commercialized," the analysts wrote. In terms of iPhone 16 sales performance, Jefferies highlighted some concerning trends. Delivery wait times for the new iPhone models have been shrinking, indicating soft demand, according to the firm. In China, Jefferies said most iPhone 16 Pro models are now available immediately, a trend also observed in the U.S., where delivery times for the Pro and Pro Max models have shortened by 6-22 days. Jefferies further noted that Apple may have reduced orders for key iPhone components, with supplier Largan Precision reporting weak 4Q24 expectations. "It is highly likely AAPL has cut lens orders for iPhone," said Jefferies, which could reflect subdued demand across the lineup. Ultimately, with global smartphone growth decelerating, Jefferies maintains a cautious outlook, noting that more advanced AI hardware required to drive significant improvements is still years away. The firm has a Hold rating on Apple shares (NASDAQ:AAPL).

Apple Intelligence's Meh Moment Ahead? Analyst Predicts 5 Months Of Build-Up Could Lead To A 'That's It?' Reaction - Apple (NASDAQ:AAPL)

On Sunday, an analyst expressed doubts about Apple Inc.'s AAPL much-anticipated new artificial intelligence system, Apple Intelligence, suggesting that it may not meet the high expectations. What Happened: Bloomberg columnist Mark Gurman took to X, formerly Twitter, and said that consumers might react disappointed or confused when the new AI feature is unveiled next week. "Mark my words, after 5 months of hype from Apple and others about Apple Intelligence, when it actually comes out next week, there is going to be a lot of 'that's it?' or 'where is it?; from consumers," he wrote. See Also: US Probe Into Potential Sanctions Breach By TSMC Threatens Apple's iPhone Chips Production Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. Why It Matters: Apple Intelligence is a collection of AI-driven features aimed at enhancing the user experience across Apple's device ecosystem, including the iPhone, iPad, and Mac. This system combines generative AI technology with personal data to offer customized assistance to users. Back in September, Apple revealed that the initial AI features would be available in beta sometime in the next month. Now, with October halfway over, indications point to a release before November. Developers and participants in Apple's public beta program can already access prerelease versions of iOS 18.1 and sign up to test Apple Intelligence. Previously, a top analyst suggested that Apple could charge its users up to $20 for its advanced AI features, which may further bolster the company's business in 2024. Earlier this month, JPMorgan analyst Samik Chatterjee suggested that the initial momentum for high-end models appears muted compared to past launches, primarily due to the unavailability of AI capabilities. Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: AI Power Demand Skyrockets, Nvidia CEO Lauds OpenAI, And Tesla's Optimus Robots Assisted By Humans: This Week In AI Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs