Uncertain Future of Apple's New AI-Powered Smartphone

On September 9, Apple unveiled its latest iPhone models, which are the first to incorporate the company's new generative artificial intelligence (AI) system. Apple has high hopes for these devices, especially as competitors like Google and Samsung have already released phones featuring generative AI. To boost its somewhat declining phone sales, Apple needs to find new ways to attract buyers. From April to June, iPhone revenue dipped by 1% year-over-year to $39 billion.

Analyst J.J. Sevillia from a U.S. e-commerce market research firm emphasized the significance of the new iPhones, stating, "These models are critical for Apple as they are the company’s most profitable products." In early June, approximately 18 months after OpenAI launched its ChatGPT bringing generative AI into the spotlight, Apple introduced "Apple Intelligence," a system designed to incorporate this technology into its smartphones. Apple claims that its intelligent system excels at email replies and generating visuals. Users can even pose more complex questions to Siri, such as finding a specific photo in their album through verbal descriptions.

In recent months, major tech companies like Google, Microsoft (OpenAI's major shareholder), and Meta Platforms have released various AI tools with commercial applications capable of generating high-quality content from casual everyday commands. Apple users can expect to access some of the new features of Apple Intelligence this fall, though others may have to wait until 2025, and some functionalities might come with a fee.

Sevillia noted, "Apple will certainly clarify that only the latest models will fully support the Apple Intelligence features. This strategy has two aims: a slower rollout of the new system may allow for better overall management, and leveraging advanced AI technology is likely to encourage users to purchase the new phones." According to statistics from International Data Corporation, smartphone brands featuring generative AI are projected to see a staggering 344% sales increase globally this year, accounting for 18% of total smartphone sales.

However, some analysts have expressed skepticism regarding Apple's ability to monetize its generative AI features. Dipanjan Chatterjee from Forrester Research remarked that users may not perceive significant differences between the new models and older ones, saying, "Apple users might not feel an urgent need to take the plunge." He further hopes that Apple will "revitalize its voice assistant, as its current performance leaves much to be desired."