Apple's iPhone Event: Anticipation Builds for 'iPhone Air' Amid AI Challenges

Apple iPhone event may lack sparkle, but rumored iPhone Air likely to spur upgrades

SAN FRANCISCO, Sept 8 (Reuters) - When Apple (AAPL.O), opens new tab debuts new iPhones on Tuesday, analysts say its biggest challenge will be to ride out another ho-hum launch as rivals have skated past it in embedding artificial intelligence into their products and services. The biggest draw this year could be a rumored "iPhone Air", a phone slimmer than what Apple has sold before and taking its name from the company's slender laptop MacBook Air. Apple would need to iron out how to pack batteries and cameras into a thinner device, analysts said, and seek to price it between the base iPhone 17 models and more expensive Pro models to attract a large number of customers. Dipanjan Chatterjee, vice president and principal analyst at Forrester, said a slimmer iPhone could spur upgrades. "It's been a while since we have seen any meaningful update to the form factor of the device beyond tepid incremental changes, and the novelty of the Air will likely induce many 14, 15 and even 16 iPhone users to migrate up," Chatterjee said. The slimmer phone could also be a stepping stone toward an iPhone that folds out flat like a book and would act as a platform for an upgraded Siri, neither of which are likely to arrive until next year, analysts said. Samsung Electronics (005930.KS), opens new tab is on its seventh generation of folding phones and Alphabet's (GOOGL.O), opens new tab is Google on its third, yet Chatterjee estimates they are less than 2% of all phone sales and will not grow beyond 5% "anytime soon." A foldable phone is important for Apple to appeal to its customers in China, where consumers like foldables and the company has been losing market share, analysts said. Historically, Cupertino, California-based Apple has received nearly a quarter of its total sales from the mid-price iPhone segment, said Gene Munster, managing partner at Deepwater Asset Management, which holds Apple shares. He expects Apple to find a way to raise prices across its iPhone lineup without any allusion to U.S. President Donald Trump's tariffs, perhaps by raising prices for larger storage capacity. "They learned to play nice with Washington - a straight up price increase might not come off well," Munster said. "But I think they have rising costs, and they have been loyal to growing margins, and to do that, you have to find some method." AI STRUGGLES Initially, Apple slated improvements to Siri for last spring, but delayed them due to engineering setbacks. Instead, it leaned on a partnership with ChatGPT creator OpenAI to power many AI features on its devices. In contrast, Google's latest flagship phones were largely designed to showcase the capabilities of its Gemini AI models. Apple is also in early talks to use Google's Gemini AI to revamp Siri, according to a recent media report. Ben Bajarin, CEO of technology consultancy Creative Strategies, said Apple may highlight improved AI processing capabilities of its next generation of Apple Silicon chips that could, in the future, power an "agentic" Siri that takes care of tasks in the background for the owners of the 2.35 billion Apple devices in use around the world, without draining the device's battery. "It could be foreshadowing of a broader kind of agentic integration with their operating system, because the operating system is going to be the thing that hits the (chip's AI processing capabilities) the most," Bajarin said. Bob O'Donnell, president at TECHnalysis Research, said that while AI adoption remains in early stages, Apple's time to catch up without suffering a long-term setback is now likely measured in months rather than years. "They have a huge share in the U.S., and most people are perfectly content," he said. "But by this time next year, if Siri still sucks, and if they don't get the foldable out, I don't know" whether that contentment will continue, O'Donnell said. Reporting by Stephen Nellis in San Francisco; Editing by Sayantani Ghosh and David Gregorio Our Standards: The Thomson Reuters Trust Principles., opens new tab

AI and iPhones likely stars of Apple event

San Francisco (United States) (AFP) - Apple is set to unveil its iPhone 17 lineup on Tuesday, with enhanced artificial intelligence features expected to take center stage. The Silicon Valley powerhouse has remained tight-lipped about what is in store at an event dubbed "Awe Dropping" in invitations, but it comes at the time of year Apple typically introduces a new generation of iPhones that drive its revenue. Despite iPhones maintaining their premium market position, Apple faces mounting pressure to prove it is keeping pace in the generative AI race. "Apple's perception as being 'late to the AI party' presents a significant challenge," market tracker Canalys said in an analyst note. While iPhone challengers powered by Google-backed Android have "aggressively advanced AI integration, Apple's slower rollout of first-party AI features has created adoption gaps," with people delaying new iPhone purchases, Canalys added. Apple introduced its "Apple Intelligence" AI features late last year, but the features underwhelmed users -- particularly the long-awaited improvements to its Siri voice assistant, which remained disappointingly basic. Looking ahead, Apple reportedly plans to integrate AI into online search next year alongside a Siri overhaul, though the company has not confirmed these reports. Apple is also reported to be partnering with Google to leverage its search and AI expertise. "I will be surprised if there is a major announcement regarding Apple's AI strategy," Forrester analyst Thomas Husson said in a note. "I am afraid that Apple's incremental innovation approach with the iPhone 17 will start reaching its limits - especially for those who are hungry for more innovation," he added. Tuesday's main attraction should be the new iPhone models, headlined by an ultra-thin "Air" variant. Most analysts view this as a strategic pivot -- Apple is positioning thinness, rather than screen size, as the new premium differentiator. A super-thin iPhone could also lay the foundation for a foldable version of the smartphone, expected in the coming years. But the engineering demands of thin phones can make them more costly to produce and shrink battery space. Prices of the new iPhones in the United States are expected to climb as President Donald Trump's tariffs add to Apple's production costs. Since China remains Apple's primary production hub, these trade policies directly impact costs. "Apple is navigating a delicate balance between its two largest markets - the US and China - amid rising trade tensions," Canalys said. "A weaker US dollar now allows Apple to increase prices in the US while maintaining competitive pricing abroad." The financial impact is already substantial: CEO Tim Cook disclosed that Trump's tariffs cost Apple $800 million last quarter, with an estimated $1.1 billion hit expected in the current quarter.

Apple iPhone event may lack sparkle, but rumored iPhone Air likely to spur upgrades - The Economic Times

Apple's upcoming iPhone launch faces muted expectations as rivals advance with AI. Analysts say a rumored slimmer "iPhone Air" could spark upgrades, bridge mid-price demand, and pave the way for foldables.When Apple debuts new iPhones on Tuesday, analysts say its biggest challenge will be to ride out another ho-hum launch as rivals have skated past it in embedding artificial intelligence into their products and services. The biggest draw this year could be a rumored "iPhone Air", a phone slimmer than what Apple has sold before and taking its name from the company's slender laptop MacBook Air. Apple would need to iron out how to pack batteries and cameras into a thinner device, analysts said, and seek to price it between the base iPhone 17 models and more expensive Pro models to attract a large number of customers. Dipanjan Chatterjee, vice president and principal analyst at Forrester, said a slimmer iPhone could spur upgrades. "It's been a while since we have seen any meaningful update to the form factor of the device beyond tepid incremental changes, and the novelty of the Air will likely induce many 14, 15 and even 16 iPhone users to migrate up," Chatterjee said. The slimmer phone could also be a stepping stone toward an iPhone that folds out flat like a book and would act as a platform for an upgraded Siri, neither of which are likely to arrive until next year, analysts said. Samsung Electronics is on its seventh generation of folding phones and Alphabet's is Google on its third, yet Chatterjee estimates they are less than 2% of all phone sales and will not grow beyond 5% "anytime soon." A foldable phone is important for Apple to appeal to its customers in China, where consumers like foldables and the company has been losing market share, analysts said. Historically, Cupertino, California-based Apple has received nearly a quarter of its total sales from the mid-price iPhone segment, said Gene Munster, managing partner at Deepwater Asset Management, which holds Apple shares. He expects Apple to find a way to raise prices across its iPhone lineup without any allusion to U.S. President Donald Trump's tariffs, perhaps by raising prices for larger storage capacity. "They learned to play nice with Washington - a straight up price increase might not come off well," Munster said. "But I think they have rising costs, and they have been loyal to growing margins, and to do that, you have to find some method." AI struggles Initially, Apple slated improvements to Siri for last spring, but delayed them due to engineering setbacks. Instead, it leaned on a partnership with ChatGPT creator OpenAI to power many AI features on its devices. In contrast, Google's latest flagship phones were largely designed to showcase the capabilities of its Gemini AI models. Apple is also in early talks to use Google's Gemini AI to revamp Siri, according to a recent media report. Ben Bajarin, CEO of technology consultancy Creative Strategies, said Apple may highlight improved AI processing capabilities of its next generation of Apple Silicon chips that could, in the future, power an "agentic" Siri that takes care of tasks in the background for the owners of the 2.35 billion Apple devices in use around the world, without draining the device's battery. "It could be foreshadowing of a broader kind of agentic integration with their operating system, because the operating system is going to be the thing that hits the (chip's AI processing capabilities) the most," Bajarin said. Bob O'Donnell, president at TECHnalysis Research, said that while AI adoption remains in early stages, Apple's time to catch up without suffering a long-term setback is now likely measured in months rather than years. "They have a huge share in the US, and most people are perfectly content," he said. "But by this time next year, if Siri still sucks, and if they don't get the foldable out, I don't know" whether that contentment will continue, O'Donnell said.