Apple is focusing on the next generation of iPhone AI features to boost sales during the first quarter of Apple’s Q2$-$3 Q4$ slump
Apple announced a number of things at the conference. Most of these features will become available in the fall, when Apple typically updates the software that runs on each of its devices.
The company hasn’t said exactly why it is limiting its Apple Intelligence features to the newest, and most expensive, hardware, though industry experts surmise that less powerful chips would possibly create a less performant AI, and that Apple would draw the line at a lackluster tool. At the time of writing, Apple had not responded to inquiries from WIRED. But whether this limitation is a technical requirement or a product differentiation strategy, it might be Apple’s best shot at convincing customers to upgrade to newer iPhones this fall.
Apple’s approach is an additive one, relying on the influence and footprint of its existing apps rather than spinning up a new chatbot or web browser that spits out human-like responses. It’s been claimed that Apple Intelligence will be able to turn sketches into images, sort through photos and videos, change the tone of emails and allow its voice assistant to tap into different applications to string together smarter responses.
Apple Intelligence has advanced writing tools that allow for full emails or messages and review what you’ve written to change the tone of a work email to help you avoid saying something you might later regret.
Apple is limiting these new AI features to the iPhone 15 Pro and Pro Max, which run on Apple’s A17 Pro chip; the iPads Pro and Air, which run on Apple’s M1 chip or later versions; and various Mac computers that run on the M1 chip or later.
An iPhone powered by LLMs and focused on new AI personalization features “should change the growth trajectory of Cupertino–spur an AI driven iPhone upgrade cycle starting with iPhone 16,” tweeted Dan Ives, managing director of Wedbush Securities and a longtime Apple analyst.
The new AI features are being rolled out at the same time Apple’s iPhone sales have slumped. In the first quarter of the fiscal year, Apple saw a decline of 10% in sales of its products, the largest drop since the summer of 2020, when some factories had to be closed. Revenue fell four percent last quarter compared to a year ago because of a decrease in the sale of the Apple product. Apple’s gross margin last quarter was still healthy, but that was due largely to its growing services business.
Apple’s phone hardware has enabled plenty of new features and functions over the past several years, but some of these tools have become commoditized or are layered in abstraction. Its custom-designed iPhone and iPad chips are bleeding edge and help sell top-of-the-line phones to the nerdiest or wealthiest consumers, but “CoreML on Apple silicon” isn’t as big of a selling point for consumers seeking midrange phones. The camera systems on the new phones are better every year, but they are not as advanced as those on high-end phones. The same is true when it comes to convenience features.
