Apple's AI Ambitions: Potential Delays Impact iPhone 16 'Supercycle' Expectations

This iPhone 'Supercycle' May Not Be So Super

Some Apple analysts believe AI will spur a boom in iPhone sales. But not everyone's buying the hype. Apple's just-announced iPhone 16 and iPhone 16 Pro will likely go down in the books as the "AI" iPhone, the one that's supposed to power all kinds of new generative artificially intelligent features, and in a very Apple-y way. But some analysts are predicting that these new phones will catalyze an even more important phenomenon for Apple's future: The start of an iPhone "supercycle." A "supercycle" is what it sounds like: an extended period of economic growth in a boom and bust cycle. In this instance the phrase is being applied to a specific commodity. And those who track the tech market closely believe -- or want to believe -- that that time has come for iPhone sales to heat up. Dan Ives, a managing director at Wedbush Securities who tends to be bullish on Apple, told WIRED he believes this will be "the strongest iPhone unit year ever and will exceed the previous record of 231 million unit sales [in 2015], making it a supercycle." Morgan Stanley analysts wrote in a research note ahead of today's Apple event that the announcement wouldn't necessarily move the market in a major way, but that they "see the potential for Apple to perform better than historical seasonality. "Apple Intelligence [will] help unlock pent-up demand and accelerate iPhone replacement cycles," analysts Erik Woodring, Maya Nueman, and Oluebube K Udochukwu wrote. Apple's iPhone may be the most influential piece of technology in the world, but last year its sales declined for four straight quarters before getting a holiday season boost. An estimated 1.5 billion people already use iPhones around the world (though Apple has not confirmed this data), and the broader smartphone market is now considered saturated. Upgrade cycles have lengthened. In the UK, Apple is required to support security updates on iPhones for at least five years into their lifespans. Even small changes to the iPhone's repairability, due in no small part to aggressive Right to Repair advocacy in the US, have led to consumers hanging on to their old phones for longer. "We estimate 300 million iPhones have not been upgraded in 4 years," Ives said. Last quarter, global iPhone sales were down one percent from the same time period a year earlier, though Apple still managed to rake in billions and beat overall revenue expectations. The iPhone's drop in China, a key market for Apple, was more stark: Earnings results showed that iPhone sales in China declined 6.5 percent, significantly more than the 2.4 percent decline analysts predicted. Apple is also no longer on the list of top five smartphone sellers in China. But the new iPhone 16 and 16 Pro models -- along with older iPhone 15 models deemed powerful enough to support new features -- have artificial intelligence capabilities that Apple says are smarter and more secure than the generative AI tools available from competitors. (Interestingly, Apple is partnering with OpenAI for some of these features.) This includes more slick photo-editing features, AI-generated custom emoji, email-writing and messaging tools, and a much more natural-sounding and interpretive Siri voice assistant.

Apple's Slow AI Rollout Threatens iPhone 'Super Cycle' Upgrade | PYMNTS.com

But even as the company staggers parts of its rollout, some analysts are hopeful that the AI features will trigger a "super cycle" for the new iPhone 16, Bloomberg News reported Sunday (Sept. 8). That's a term for a wave of upgrades after a long period of demand, writes Bloomberg's Mark Gurman, who also deems the idea of a super cycle unlikely this year. Part of the reason is consumer caution, in China and around the world, though the larger issue could be technological, as the new iPhones will look almost identical to the previous models. And even though AI tools will be a prominent part of this week's launch, Gurman argues that it will "become increasingly clear that consumers will have to wait for the best features." The complete range of AI features is expected to come with the iOS 18.1 update next month. Among the other issues, the report adds: features like ChatGPT won't be a part of the rollout, and Apple Intelligence won't be available in the European Union or China. In addition, Gurman writes, most consumers aren't well-versed in AI, and many won't understand the need for Apple Intelligence, meaning it will take several months for the tech giant to educate them on its benefits. Experts interviewed by PYMNTS say that Apple Intelligence could eventually reshape the digital commerce landscape. "Apple's AI integration could bring us closer to the concept of a true AI assistant -- something that's portable, convenient and seamlessly integrated into our daily lives," Ryan Waite, vice president of public affairs at Think Big, told PYMNTS last month. "While we've seen attempts at this with devices like Rabbit, they haven't fully delivered on the promise." The efforts go beyond shopping, PYMNTS wrote, noting that Apple's mobile wallet is also slated for its own AI makeover. "There's a huge opportunity for Apple to change consumer spending behavior and take its mobile wallet to the next level by integrating it into its core AI strategy," Darryl Cumming, director of product management at payments solutions company NMI, told PYMNTS. "OpenAI is only the beginning." Combining AI with Apple Pay could bring about more intuitive, context-aware financial experiences, that report said. "We should expect consumer choices in the Apple universe to be amplified and channeled into more App Store purchases and commerce personalization," Cumming added.

Apple Intelligence delays could impede iPhone 16 'supercycle' | TechCrunch

When Apple unveiled its AI plans at WWDC in June, analysts suggested the feature could put the iPhone 16 on track for another "supercycle." Like the addition of 5G before it, industry watchers believed that Apple Intelligence's arrival might convince holdouts to bite the bullet and upgrade their device. We'll have a much better picture when the company reveals the iPhone 16 at tomorrow's "It's Glowtime" event in Cupertino. In the meantime, however, it's believed that Apple Intelligence's slow rollout could significantly hamper supercycle potential. In June, Apple showed the world a take on AI firmly in-line with its mission statement of prioritizing user experience. Trained on small models -- instead of the massive black boxes behind services like Google Gemini and OpenAI's ChatGPT -- Apple's play is centered around improving existing experiences through generative AI. As Bloomberg notes today, however, delays could impact the iPhone 16's bottom line. WWDC offered a lot of big promises, but we're unlikely to see many delivered until 2025. Regional limitations present key roadblocks as well, including in the EU and China -- the latter of which can make or break Apple financials in any given quarter. ChatGPT integration, meanwhile, is also unlikely for launch. In the lead up to WWDC, the industry wondered whether Apple would be able to become a major player with the generative AI competition. But while the developer conference wowed observers with impressive demos, there's still a lot of catching up to do. At the time of writing, iPhone 15 Pro/Pro Max are the only devices approved to run Apple Intelligence. Tomorrow's event is set to change that, especially as further rumors point to increased uniformity across the iPhone 16 line. The base models are expected to get A18 chips, with the Pros, fittingly, getting an A18 Pros. While sales are incredibly important to Apple and its shareholders, Apple Intelligence is a massive, multi-faceted undertaking, and rushing it out too early could have a longer term adverse impact on the company's bottom line than a staggered rollout.

Apple event: Why AI alone may not be enough to save the iPhone 16

The iPhone 16 launch is right around the corner, and while Apple Intelligence is expected to be a major part of the event, there's a catch: many of the hyped features won't be available right away. In fact, Apple's AI-powered tools may not be enough to drive massive upgrades this year, leaving many wondering if the iPhone 16 will live up to the hype. Apple Intelligence: A waiting game Apple Intelligence, which was introduced with much fanfare earlier this year at WWDC 2024, won't be fully ready for the iPhone 16 when it hits the market. Key features -- like OpenAI's ChatGPT integration and significant Siri upgrades -- are confirmed to arrive as late as end of this year and early next year. But those looking forward to AI-based tools like Image Playground and Genmoji will have to wait even longer, too, as Apple has reportedly pushed them back (via Bloomberg) to the iOS 18.2 update, which is slated for a December release. Additionally, the rollout of Apple Intelligence will be slow and staggered, unlike some of Apple's other attention-grabbing features in the past. It won't be available in some critical regions, including the European Union (countries like France, Germany, and Italy) and China, both massive markets for Apple. Even when the iPhone 16 officially launches, it won't ship with these features immediately. Instead, they will arrive with an iOS 18.1 update in October, meaning early adopters may feel like they're missing out. Is AI the game-changer? With many key AI tools delayed, the question arises: will consumers be swayed by the promise of future features? Sure, Apple Intelligence might sound futuristic and exciting, but without its headline-grabbing capabilities at launch, it's hard to see AI alone driving upgrades. This is especially true given that consumers will have to wait until next year to see the full range of Siri's new powers. By the time the iPhone 17 comes out in 2025, Apple Intelligence will likely be more fully fleshed out, but for now, the staggered release might leave users underwhelmed. iPhone 16 hardware: Small changes, big impact? With the AI rollout stumbling, Apple will have to lean heavily on hardware upgrades to convince users to upgrade to the iPhone 16. There are some exciting updates on that front, though they aren't exactly groundbreaking. The iPhone 16 Pro and Pro Max are expected to come with camera upgrades including 4K video recording at up to 120fps and a new capacitive capture button that makes snapping photos and recording videos even more seamless. The screens are also expected to get a bit bigger, with the Pro Max model boasting a 6.9-inchdisplay for a more immersive experience. The iPhone 16 and iPhone 16 Plus will come with 8GB of RAM by default, which is a nice upgrade, and Apple is also bringing the Action button, previously a Pro-only feature, to the lower-end models. This customisable button allows for quick access to various functions, which should make the phone feel more intuitive. What's next for Apple? While the iPhone 16 may not deliver the revolutionary upgrades Apple users have been waiting for, the company is clearly setting the stage for bigger things in the future. By fall 2025, when the iPhone 17 rolls out, Apple Intelligence will be available globally, and the iPhone is expected to get a much-needed design refresh. But the lack of immediate AI advancements and incremental hardware improvements mean this year's model may not be enough to get everyone to rush to upgrade. But keep an eye out for the iPhone 17 -- by then, Apple might truly deliver the next big thing. This year's launch -- called It's Glowtime -- feels like a stepping stone rather than a major leap forward. Expect bigger things from Apple in 2025, but for now, manage your expectations.

'Don't Believe The Hype About An iPhone 16 Super Cycle,' Gurman Says: 'Consumers Will Have To Wait For The Best AI Features' - Apple (NASDAQ:AAPL)

New iPhones will look nearly identical to last year's models except for some minor camera upgrades and other features, he says. Shortly ahead of Monday's iPhone 16 launch event, Bloomberg columnist Mark Gurman delved into the supercycle which many are anticipating following the launch of the newest iteration of the Apple, Inc.'s AAPL flagship product. Gurman Dampens Hopes: Expectations of some analysts that the Apple Intelligence will set off a long-awaited super cycle for the new iPhone 16 may not materialize, said Gurman in his latest Power On newsletter. These analysts foresee a rush of upgrades following pent-up demand on the premise that consumers are excited about AI right now, he said. Providing a "dose of reality," Gurman said, "a super cycle is simply unlikely this year." Macroeconomics may party hinder any potential super cycle, the columnist said, adding that smartphone softness is ongoing in China and other consumers elsewhere are also holding tight to their money. The bigger issue boils down to the AI technology itself, the Apple specialist said. The new iPhones will look nearly identical to last year's models except for some minor camera upgrades and other features, he said. These upgrades may not motivate consumers to upgrade, he added. Thirdly, Apple Intelligence tools may be a big part of Monday's launch event, but it will increasingly become clear that consumers will have to wait for the best AI features, Gurman said. See Also: Best AI Stocks AI Pushbacks: Apple Intelligence isn't fully baked and the initial version will likely miss many features, including OpenAI's ChatGPT, said Gurman. He also noted that Apple Intelligence won't be available in the European Union - a key market for Apple and which includes countries such as Italy, France, Spain, Sweden and Germany. It also won't be ready for China, another crucial overseas market, he added. Many consumers aren't well versed with AI and therefore they won't understand why they would even need Apple Intelligence, the columnist said, adding that it may take several months for the company to explain the benefits of the technology. The introduction of Apple Intelligence will be slow and staggered, and when the iPhone 16 ships later this month it won't have the capabilities, Gurman said. He expects the features to start rolling out as part of the iOS 18.1 software updates in October. The beta version of iOS 18.1 showed features that "summarize notifications and web content, tools to improve writing, a way to remove people or objects from images and automated transcriptions of phone calls, and prioritization of important emails within the Apple Mail app," Gurman said. Apple has decided to delay new image-generation features to iOS 18.2, which will release in December, he said. "That includes the Image Playground app and the Genmoji capability, which uses AI to make emoji based on inputted text," he said. "This spread-out approach means it's unlikely for the AI platform to be compelling enough to drive serious upgrades this year," Gurman said. But Apple should be in a stronger position when it is time for the next iPhone, which is in the fall of 2025, he said. "Don't believe the hype about an iPhone 16 super cycle. But you can start believing in one for the iPhone 17 next year," he added. Read Next: Elon Musk Left In Awe As Apple Sells 1.4M iPhones Every 2 Days -- An 'Insane' Growth From Its Launch Year Market News and Data brought to you by Benzinga APIs

iPhone 16 Supercycle 'Unlikely' This Year, Despite The AI Boom; Macroeconomic Factors Highlighted As Some Of The Reasons Behind Lowered Momentum

Apple's 'It's Glowtime' event being held tomorrow will showcase the company's four new iPhone 16 models, with all of them said to arrive with a slew of impressive upgrades, not to mention every one of them being able to run a combination of cloud-based and on-device generative AI features. Unfortunately, these advantages are not expected to result in a supercycle of the upcoming series, as a new report mentions that there are various factors why this may happen. Despite Apple reportedly increasing its iPhone 16 supply to 90 million units for 2024, surpassing the iPhone 15 tally by 10 percent, Bloomberg's Mark Gurman says in his latest 'Power On' newsletter that a supercycle of the flagship family is unlikely. There are several reasons why this could materialize, one of them related to macroeconomic factors. Gurman points out that consumers in China and other parts of the world are still holding tightly to whatever funds they have, even with AI's formidable presence in this market. "In recent days, Apple Inc. made the decision to postpone more of its highly anticipated artificial intelligence features, underscoring the idea that its AI push will take time to pay off. And yet, some analysts are still hoping that the Apple Intelligence features will set off a long-awaited "super cycle" for the new iPhone 16 -- a rush of upgrades following pent-up demand. Their rationale: Consumers are excited about AI right now, and many have been waiting years to buy new iPhones. Well, allow me to provide a dose of reality. A super cycle is simply unlikely this year. Some of the reasons are macroeconomic: There's still smartphone softness in China, and many other consumers around the world are holding tight to their money." However, another reason might have to do with the iPhone 16 models themselves. The newsletter states that all of the upcoming models will look nearly identical to their direct predecessors and that the first change that consumers notice is a redesign, which encourages them to make a purchase. While Apple Intelligence can play a pivotal role in becoming a catalyst for increased sales this year, an earlier survey revealed that a competitive price and a robust cooling solution were the top two reasons consumers would upgrade to the iPhone 16. Also, it is important to note that generative AI features will not be available to iPhone 16 owners as soon as they power on their devices for the first time. In fact, these features are not expected to roll out until iOS 18.1 is officially released. While Gurman may not have a strong enough belief that the iPhone 16 lineup will bring in a supercycle, he does pin his hopes on the iPhone 17 range arriving next year. For one thing, the RAM will be bumped to 12GB instead of 8GB, and Apple will reportedly bring LTPO OLED technology to all four models. This means that even the base models will have ProMotion technology and support higher refresh rates, prompting thousands to spend less money to get the same upgrades.

Apple's new iPhone 16 with AI seems ... kind of boring. That could actually be a good thing.

This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in. As expected, AI was the centerpiece of Monday afternoon's event. Apple spent much of the presentation emphasizing how the iPhone 16 was "built from the ground up to deliver Apple Intelligence." For me, the most interesting features coming to Apple Intelligence are the Writing Tools, AI-generated emojis, and the camera's visual intelligence capabilities. Still, I wasn't left in awe by any of the demonstrations -- especially considering the showy announcements from big AI players like OpenAI and Google, which featured super intelligent assistants with humanlike conversation skills. But Apple doesn't have to stun consumers right away with a game-changing product -- and maybe that's fine. With 1.5 billion iPhones worldwide, according to Wedbush Securities, the foundation of its empire is solid enough to build to the moon. Since it's got the trust of those people, who are already in the Apple ecosystem, it maybe means that there's no rush to break boundaries in AI compared to making Apple users' lives easier -- and compared to their less-dominant competitors. All it has to do is what Apple already does -- and better than pretty much everyone else: make our daily lives easier. And it's hard to demonstrate that in a 30-second skit showing off Apple Intelligence. It's maybe also a question of optics. It's hard to show in an exciting way exactly how many times someone might need a ChatGPT-assisted Siri to look up something without having to take their phone out, open the app, and type their question. That thought was echoed by Deepwater Asset Management managing partner Gene Munster, who attended the event at Apple Park. He said the keynote video doesn't do the new iPhone 16 lineup justice. "It's a new paradigm, and the paradigm will change how almost all humans will interact with tech," Munster said. This paradigm shift, which Munster compared to the transition from flip phones to touchscreens, will be spurred by people testing these products in Apple stores. And it looks like Apple knows that. The tech giant reportedly began briefing its retail employees on all things Apple Intelligence weeks before the iPhone 16 lineup launch. It seems to me that Apple is gearing up to have consumers see its new AI tech for themselves before deciding to upgrade. Turns out that slow and steady may actually be the best way to avoid being labeled boring.

Will Apple Intelligence be reason enough to upgrade to an iPhone 16?

What sparks an iPhone upgrade? It might be a revolutionary design change like flat edges to curves or the introduction of Face ID. More likely, it's a photographic feature like a decent telephoto lens or when Portrait Mode first arrived and transformed every new iPhone 7 Plus into a virtual pro-level camera. Sometimes, it's not so much the features alone that inspire an upgrade - it's the FOMO. I know that anyone who saw my Portrait Mode images from that iPhone 7 Plus was so agog that they looked dismissively at their likely iPhone 4s or 5s and almost immediately began researching the trade-in prospects and costs for that new device. On the eve of the Apple iPhone 16 Event ("It's Glowtime!"), I was reading Mark Gurman's latest Bloomberg newsletter, which discusses some smartphone industry watchers' hopes that Apple Intelligence sparks a supercycle of upgrades. Gurman doesn't believe this will happen, and I'm inclined to agree - mostly. The problem with artificial intelligence, as perceived by most people, not in the tech space, is that it is both a colossus capable of anything and a black box that has no obvious utility to their everyday lives. Consumers are undoubtedly intrigued and inundated with the possibilities of these generative tools. They marvel at videos created by OpenAI's Sora and how Google Gemini, ChatGPT, and Copilot can answer questions and summarize vast swaths of text. Some people need these things, but most average consumers and many millions of iPhone owners are likely wondering what they might do with any of these new fangled tools. What's the purpose of a Genmoji? Do I really need to keep deleting Aunt Mable from every photo with an Apple Intelligence magical eraser? Is the iPhone 16 Siri better because it makes the whole iPhone screen glow instead of just a tiny little orb near the bottom? What we must consider as consumers wonder if its time to trade in the iPhone 15, iPhone 14, or iPhone 13, is if anything that arrives as part of Apple Intelligence next week will be the killer app. Like many new tools Apple introduces at a platform level, Apple Intelligence will simply arrive with new phones, much as Apple Journal and Shortcuts once did. By my measure, those two tools are not widely used and have not sparked upgrades. Apple Intelligence, though, is different. It's more pervasive, living across Siri, messaging, writing of all kinds, imaging, image creation, and more. Not all of that will ship with iPhone 16 phones when they arrive in a few weeks (all running iOS 18 and, I'm guessing, featuring Apple Silicon capable of supporting Apple intelligence). The lack of complete Apple Intelligence integration in the early going might dampen enthusiasm for upgrades, that is, of course, if that's the reason people are choosing to do so. More likely, though, any tsunami of iPhone 16 upgrades will be driven by tremors more deeply bedded in the long-term use of Apple's well-built and longly-supported handsets. There are people still using iPhone 11 phones out there (there might even be some iPhone 7 or iPhone 8 handsets in pockets and hands, too). As platform and app support runs out on some of these aging models, people will look to the next big thing. However, if they were holding onto their old iPhone because they couldn't afford the latest and greatest, they might look for price reductions on, say, the iPhone 14 or 15, or maybe even the iPhone SE. This assumes that Apple will continue selling one or two legacy models. It's worth remembering, though, that older models will not support Apple Intelligence. As it is, only the iPhone 15 Pro and 15 Pro Max and the powerful A17 Pro chip support Apple's version of AI. In other words, if you want Apple Intelligence, you have to swing big and go for an assumed iPhone 16 option. I like what I see in Apple Intelligence and applaud Apple for finally getting into the generative AI game. It does not matter that it is late because the Cupertino tech giant owns such a commanding position in the market and is a cultural touchstone for the technology zeitgeist. Putting Apple Intelligence in so many new phones at once will likely create some of its own momentum. Messaging from iPhone 16-owning consumers about their Apple Intelligence experience to the interested and disinterested public will either trigger FOMO and launch a more aggressive upgrade cycle or fall on deaf ears as most people still think AI is for somebody else. No Apple Intelligence by itself is probably no reason to upgrade to the iPhone 16 - at least not yet.