During Monday’s Apple developer conference, the company discussed more than just integrating ChatGPT and other cutting-edge AI technologies into its software. Additionally, the goal was to sell more iPhones.
Apple has looked to AI as a method to energize its devoted fan base of more than 1 billion customers. Additionally, it aims to reverse a fall in sales for its best-selling product in the face of unstable consumer spending and resurgent tech rivals.
According to multiple analysts, the software, which runs on at least an iPhone 15 Pro or Pro Max, might lead to a wave of new purchases. Some anticipated the greatest upgrade cycle since Apple’s 2020 iPhone 12 release. This was due in part to the 5G connection that attracted customers, and it was expected to occur in the fall.
Analyst Gil Luria of D.A. Davidson stated, “What we saw today was more compelling than anything we’ve seen since.”
The business unveiled their version of generative AI, known as Apple Intelligence, which allows it to create text, graphics, and other content at will.
Apple showed off its AI’s ability to create personalized emoticons, a cartoon to text friends, and tweaks to make an email appear more formal. Siri, its digital assistant, might ask consumers if they also wanted ChatGPT’s assistance.
Some analysts expressed pessimism, saying that people wouldn’t rush to Apple stores to upgrade their phones with more AI.
“Perhaps there may be enough in the new and improved Siri-powered, intelligently Apple devices to stanch some of the device revenue that’s been hemorrhaging lately, but there isn’t enough to create a new band of followers,” Dipanjan Chatterjee, a Forrester analyst,
Another statement from Tejas Dessai of Global X was, “Investors clearly want a more comprehensive and ambitious strategy from Apple when it comes to AI.” The announcement caused the company’s stock to drop 2%.
UPGRADE WITH AI
Whether you like them or not, not every iPhone will support Apple’s AI features.
Customers who own smartphones, according to the business, must upgrade to the iPhone 15 Pro or Pro Max, which Apple started selling in September 2023. The AI is dependent on semiconductors found in Apple’s most recent iPhones. It was designed to process data privately on a user’s device.
Dan Ives, an analyst at Wedbush Securities, believes that’s a huge potential. He calculated that in the last four years, about 270 million iPhones had not been updated.
“We estimate 15%+ of the Apple installed base will upgrade to iPhone 16 as Apple Intelligence is the killer app many have been waiting for,” Ives stated.
It is anticipated that the iPhone 16 will be released this autumn.
Another plus for Apple, according to Gene Munster, a managing partner at Deepwater Asset Management, is its simple integration with ChatGPT. “They’re really taking the friction out of using AI,” he stated.
Apple’s most recent annual report states that the company’s iPhone revenue for the fiscal year ending in September 2023 was $200.6 billion. This marked a decrease from the previous year’s $205.5 billion, as reported.
Still, Apple’s consumer appeal extends beyond AI. Martin Yang from Oppenheimer & Co. suggests that early adopters would be attracted to the AI enhancements because they enable activities within and across apps. However, their primary desires might still lean towards a larger iPhone display or an improved camera.
“That action part will make Apple an immediate leader in consumer AI,” Yang stated.
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