On Sept 9, 2024, Apple unveiled the new iPhone 16, marking a significant moment for the tech industry. This smartphone will be the first to feature Apple’s “Personal Intelligence System”, introduced at the June 2024 Apple Worldwide Developers Conference, branded as Apple Intelligence. Some observers see this as the dawn of the AI Phone era – a new generation of smartphones powered by artificial intelligence.
Whether the AI features of this new iPhone will truly be as impressive as showcased in Apple’s promotional videos remains to be seen when Apple Intelligence officially launches in October.
Here are my seven observations regarding the release of this new iPhone:
1. Smartphone sales: Over the past few years, smartphone sales have entered a phase of slower growth, much like the PC market before it. It seems that everyone who needs a smartphone already has one, with some even owning more than one. The industry views the AI Phone, as well as AI-powered PCs, as the next wave of replacement devices or upgrades. Notably, since only the iPhone 15 Pro Max currently supports Apple Intelligence, this will likely prompt many iPhone users to consider upgrading, which could indirectly boost overall smartphone sales and growth.
2. Timing of product launch: Unfortunately, when Apple announced the iPhone 16, they also revealed that Apple Intelligence wouldn’t immediately be available on iOS 18 when customers receive their pre-ordered iPhones on September 20. In fact, the US English version of Apple Intelligence will only be available as a beta update in October, with the UK and Australian versions arriving in December. Meanwhile, languages like Chinese and Japanese will not see releases until 2025. This “delayed gratification”, driven by non-consumer factors, could somewhat dampen the anticipated wave of upgrades, causing some potential buyers to wait and see before making a purchase.
3. Apple’s AI team: At the June 2024 developers’ conference, Apple did not clarify that Apple Intelligence would miss the September iPhone release, only to be available later. This raises questions about whether Apple’s AI team needs strengthening. Today, top AI talent is found at companies like OpenAI, Anthropic, Google, and Microsoft. If Apple intends to compete in the AI era with these leading firms, it must leverage its vast resources, such as its significant cash reserves, to build a formidable AI development team and prepare for the next phase of technological advancement.
4. Smartphone design: Apple is often criticised for the design of its new iPhones, with some saying that the “look” hasn’t changed much in a decade. “Other companies have foldable phones, some even fold three times! Why does Apple still have just one screen?” To counter this argument, let’s consider automobiles. Over 100 years after the car was first invented, today’s vehicles still resemble their early counterparts – a chassis with four wheels and an engine. We don’t see cars with wings because airplanes already exist. Similarly, after more than 15 years of development, smartphones have matured, and incremental upgrades – whether in software or hardware – are likely the most fitting for current market needs.
5. AI-driven wearable devices: In this wave of AI advancements, many emerging companies are exploring new opportunities in AI-driven wearable devices, beyond just smartphones. Over the past year, several related products have been announced or launched, such as Humane’s Ai Pin. However, I believe that as smartphones become increasingly AI-integrated, consumers, already accustomed to using their phones daily, may find no need to buy additional devices unless they are already familiar accessories, like watches or glasses. For this reason, I view Meta’s long-term investment in AI-powered glasses as a promising venture.
6. Google’s moves: Of course, we must not forget Google, which dominates half of the mobile internet market (Android vs iOS). Google has been actively integrating its AI model, Gemini, into its Android platform. As the battle for the AI Phone market intensifies, Google will undoubtedly play a key role.
7. The Jony Ive factor: Also noteworthy is the collaboration between former Apple Chief Design Officer Jony Ive and OpenAI’s Sam Altman. They are reportedly developing an AI-powered device. Will this turn out to be an AI Phone, or could it be an entirely new type of device? This remains to be seen, but it’s certainly exciting to anticipate.
In conclusion, one of the key questions for the industry moving forward will be whether the launch of this new iPhone marks the arrival of the AI Phone era. Ultimately, that will depend on how Apple Intelligence performs once it becomes available.
