Some of these features won’t be available until next year, but Apple’s push to add artificial intelligence to the iPhone is still likely to generate a sales boom, optimistic analysts say. While in the past the iPhone’s hardware upgrades were the main draw, the appeal now is how Apple’s hardware, like its custom chips, will serve advanced AI.
“It doesn’t matter if Apple Intelligence is supported from day one, the new iPhones are future-proof,” says Paolo Pescatore, analyst and founder of PP Insights. Pescatore, like Ives, thinks this is the start of an iPhone supercycle. “Apple’s prowess in silicon, hardware and services will all converge to bring Apple Intelligence to life.”
Pescatore adds that Siri needed a much-needed overhaul and he thinks iPhone customers might now be willing to give Siri another chance.
Apple did not immediately respond to inquiries about the company’s iPhone sales growth potential.
Super unknown
Other analysts aren’t buying into the supercycle hype. Anand Joshi, an engineer by training and former tech executive who is now an analyst for TechInsights, says the technical limitations of older iPhone models are likely to spur upgrades. But he estimates that there is only a “one in two chance of having a supercycle”.
“The main driver will be AI, but I remain skeptical about the user experience,” says Joshi.
Similarly, Varun Mishra, principal analyst at Counterpoint Research, says this is the start of an iPhone revenue “gradual cycle” – a series of incremental increases – rather than a supercycle. This is partly because the release of Apple’s AI features will be staggered over several months.
“Most of the use cases offered through Apple Intelligence are generally ‘nice to have’ and not so compelling that a large portion of users will upgrade their devices sooner than expected,” says Mishra. “We are also not seeing pent-up demand, as in previous supercycles, for genAI features among consumers.”
There is also the question of whether these new AI-based iPhones will boost sales in China, one of the most crucial markets for Apple, both in terms of sales and production of iPhones.
Last fall, the Wall Street Journal reported that Chinese authorities had ordered employees of government agencies to stop using their iPhones and other foreign-made electronic devices for work, which does not affect the majority of the Chinese population but could have a “deterrent effect” in the long term. » on the Apple brand in China. As Apple has rolled out more AI features, which rely on both on-device processing and data sent and received from the cloud, questions have arisen about exactly how Private Compute The company’s cloud will operate in China. Apple has yet to share details on how this will work.
Earlier today, at the iPhone launch, Apple announced plans to expand its AI capabilities to other languages, including Chinese, starting next year.
TechInsights’ Joshi says he doesn’t believe the Chinese government’s crackdown on iPhones will have much impact at this point. “China will continue to buy the iPhone,” he said.
Ives believes the key to Apple’s success in this market will be unusual for a company that prides itself on its full-stack technology and tightly controls the experience it delivers: “Finding a Chinese partner will be key for Apple to enable AI in China. “, he said.
