Apple Intelligence isn’t convincing people to buy a new iPhone, Apple analyst Ming-Chi Kuo said today. Kuo says a supply chain survey indicates the AI features are not driving users to upgrade to the iPhone 16.
Kuo says the delay that took place between the unveiling of Apple intelligence in June 2024 and its delayed launch after the new iPhone 16 lineup hit shelves significantly declined the appeal of Apple Intelligence when compared to cloud-based services like ChatGPT.
Apple’s efforts to promote on-device AI face multiple structural challenges. For example, despite the initial buzz following Apple Intelligence’s debut at WWDC 2024, its appeal has significantly declined compared to cloud-based AI services, which have advanced rapidly in subsequent months.
Kuo doesn’t believe that Apple Intelligence is going to drive user upgrades or revenue, although he says there is some hope for its long-term prospects.
I’m not bearish on Apple Intelligence’s long-term prospects; however, given the points discussed above, there is no evidence of Apple Intelligence’s ability to benefit hardware replacement cycles or service business. As such, it should be cautious of potential downside risks created by earlier market over-optimism.
Although Apple made Apple intelligence the main focus of its iOS 18 unveiling, when the iPhone 16 models launched in September, there were no Apple Intelligence features available. While a few features, like Writing Tools and other capabilities, did arrive in the iOS 18.1 update in October, other AI features, like Image Playground and Genmoji weren’t available until December.
There are still several Apple Intelligence features that have not yet been implemented, including major changes to Siri that are rumored to be on the way in April.
