Apple’s developer conference on Monday was about more than just equipping its software with the latest artificial intelligence technologies, including ChatGPT.
It was also about selling more iPhones.
Facing unstable consumer spending and the resurgence of its technology competitors, Apple has turned to AI as a way to reinvigorate its loyal fan base of more than 1 billion customers and reverse declining sales. sales of its best-selling product.
The software, which requires at least an iPhone 15 Pro or Pro Max to work, could encourage a cascade of new purchases, several analysts believe. Some predict the biggest upgrade cycle will take place in the fall since Apple released the iPhone 12 in 2020, which attracted consumers in part thanks to 5G connectivity.
“What we saw today was more compelling than anything we’ve seen since,” said analyst Gil Luria of DA Davidson.
The company introduced what it called Apple Intelligence, its vision of generative AI capable of conjuring up text, images and other content on command.
Apple demonstrated how its AI could generate personalized emojis, a cartoon for texting friends, or edits that make an email more professional. Its digital helper Siri could ask users if they also want help from ChatGPT.
Some analysts expressed skepticism, predicting that consumers would not rush to Apple stores to get more AI on their phones.
“Maybe there will be enough in Apple’s new, smarter, Siri-powered devices to choke off some of the device revenue that has been hemorrhaging lately, but there isn’t enough to create a new group of followers,” said Dipanjan Chatterjee, an analyst at Forrester. .
Tejas Dssais of Global » Shares of the company fell 2 percent following the news.
Moving to AI
Like them or not, Apple’s AI features won’t be available on every iPhone.
The company said smartphone customers should upgrade to the iPhone 15 Pro or Pro Max that Apple began selling in September 2023. AI, designed to be able to process data privately on a person’s device user, depends on the chips of the new Apple smartphones.
According to Dan Ives, an analyst at Wedbush Securities, this represents a big opportunity. It estimates that some 270 million iPhones haven’t been upgraded in four years.
“We estimate that more than 15% of Apple’s installed base will move to iPhone 16 because Apple Intelligence is the flagship app that many have been waiting for,” Ives said.
The iPhone 16 is expected to be released this fall.
Gene Munster, managing partner at Deepwater Asset Management, said another strength of Apple was its easy-to-use integration with ChatGPT. “They really take the friction out of using AI,” he said.
Apple’s iPhone revenue for its fiscal year ending September 2023 was $200.6 billion, down from $205.5 billion a year earlier, according to the latest annual report of the company.
Yet AI is only part of Apple’s appeal to consumers. They may primarily want a bigger iPhone screen or a better camera, but AI updates would appeal to early adopters and stand out for their ability to take action within and between apps, said Martin Yang of Oppenheimer & Co.
“This action will make Apple an immediate leader in consumer AI,” Yang said.
(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First publication: June 11, 2024 | 9:22 a.m. STI
