- Apple is betting on AI to boost declining iPhone sales.
- Competitors like Google and Samsung have already launched AI features.
- It’s unclear if AI alone will convince users to upgrade their iPhones.
Shooting for the stars
Apple is quietly confident about the power of AI to sell iPhones, expecting to ship at least 90 million units of the upcoming iPhone 16 models.
This would represent a 10% boost in sales compared to the current generation of iPhones. CEO Tim Cook has declared generative AI a “new chapter” in Apple’s history of innovation, and the company is banking on Apple Intelligence to drive sales at a crucial moment.
However, Apple’s biggest revenue stream has been stuck in a downward spiral lately. In its last full financial year, iPhone sales were down to $200 billion from $205 billion the previous year.
The company has faced even more serious declines in recent months in key markets like China, where iPhone sales dropped 19% in the first three months of 2024.
Changing consumer trends in the smartphone market, users being less inclined to upgrade their phones immediately, pose additional challenges for Apple.
Facing the competition
Apple boldly presented its vision of generative AI at its Worldwide Developers Conference (WWDC) in June, but it did so several months after some of its main competitors.
Google has been rolling out its AI model Gemini to Pixel devices this year, Samsung heralded Galaxy AI the launch of its flagship S24 smartphone range back in January.
Samsung has made its AI compatible older smartphones, which means users can try out new AI features without shelling out for a new gadget.
This may hurt Apple’s chances of making a fresh dent in the Android market Apple Intelligence.
The ultimate question
The bigger question looming over Apple is whether users care about AI enough to shell out for an upgrade.
While the company has partnered ChatGPT maker OpenAI put AI at the heart of its devices, it’s not clear if users will be willing to buy a new phone for software that they might deem useful only for basic tasks such as writing emails editing photos.
Apple won’t have to wait long to find out if its AI bet pays off.
