Kuo: Expectation That Apple Intelligence Will Drive iPhone 16 Sales 'May Be Too Optimistic'

[MacRumors]

Apple does not appear to have increased iPhone 16 orders despite reports to the contrary, according to Apple analyst Ming-Chi Kuo. Kuo cites recent earnings reports from Apple suppliers TSMC and Largan as evidence.

TSMC recently said that it did not see an increase in unit growth, while Largan said that orders for high-end models in 2024 are similar to last year. Kuo believes that Apple's iPhone 16 orders for the second half of 2024 are around 87 million units, which is lower than the 91 million iPhone 15 units that Apple ordered in 2023.

Kuo said that certain suppliers may have been asked to increase production, but that may be related to "specific reasons within individual industries or components."

He suggests that expectations that Apple Intelligence will drive iPhone 16 sales "may be too optimistic" as the feature is available in U.S. English only.

The launch of Apple Intelligence is generally considered to be the reason for the increase in iPhone 16 orders. However, Apple Intelligence will only be available in Beta for US users in 2H24, and Apple Intelligence Siri only supports English. Regardless of whether Apple Intelligence alone can drive replacement demand (which is another big topic), the expectation that consumers will buy the new iPhone 16 for the Beta version of Apple Intelligence in 2H24 may be too optimistic.

Earlier this month, Bloomberg suggested that Apple was counting on the iOS 18 AI features to boost iPhone shipments by 10 percent in 2024. Apple Intelligence requires an iPhone 15 Pro or later, so customers with an older iPhone will need to upgrade to the iPhone 16 to get the technology.

Apple Intelligence includes a long list of new capabilities, including Writing Tools for proofreading, polishing, and summarizing text, Image Playground for generating images, and Genmoji for creating custom emoji. Apple Intelligence will also be used to overhaul Siri, but the new Siri functionality isn't slated to launch until 2025.

So far, Apple has not established an AI deal for Chinese consumers, and Apple Intelligence will also not be coming to the European Union when iOS 18 launches.

Article Link: Kuo: Expectation That Apple Intelligence Will Drive iPhone 16 Sales 'May Be Too Optimistic'

 

[FlavorfulTreat]

It isn't a factor for me at all. It is time for a new phone in my personal upgrade cycle. I guess it might be if it is something absolutely amazing, but so far it isn't the reason I will upgrade.

 

[joshwithachance]

I don't know a single person outside of the tech community that sees AI as a selling point. Anecdotally I've actually observed the opposite.

 

[Böhme417]

I've talked to people of various ages and interest levels in technology, and no one seems to care about it very much. There seems to be some minimal interest among enthusiasts, and that's about it. I don't see this driving sales at all.

 

[abatabia]

While I love the AI that’s baked into my pixel 8 pro, I didn’t buy the phone because of ai and I never will.

 

[iMac The Knife]

If things carry on the way they have been, we all know design won't drive iPhone 16 sales, that is for sure. So, hopefully AI can.

 

[Mr. Nice]

In Europe a lot of people can switch directly to the iPhone 17. apple intelligence will take to long to arrive in German etc. at the iPhone 16. I will switch because I have an iPhone 13 mini, and the battery life annoys me.

 

[scorpio vega]

Ai is something I genuinely don’t care about and honestly most day to day people see Ai as weird. So I never expected it To be a driving force.

 

[lenningj]

Breaking News, businesses take huge u-turn on AI investments as markets plummet due to lack consumer interest 🤞

(i wish)

 

[Johnny907]

Way, way too optimistic.
Older buyers are fine with their current phone and younger buyers aren’t stupid and know Apple is artificially withholding AI from current phones.
The 16 needs to offer a better excuse to upgrade than just AI.

 

[macduke]

I mean, it's cool and useful and I'm looking forward to using it but they're only just now catching up with the competition. It's not like Apple Intelligence exists in a vacuum. They have to prove themselves, go above and beyond, and a lot of users aren't buying into it yet given the track record of Siri for the past 13 years.

And yes, Siri really is that old, and just look at it. I swear some things have regressed.

 

[bluecoast]

Most of apple intelligence will come out in spring 2025 and mostly in us english. So not an upgrade super cycle really. Roll on iPhone 17.

 

[arthurgd3]

When Apple or Google or any OEM trying to sell AI as a selling feature can actually showcase real-world meaningful ways to incorporate AI into day to day use then people won't be sold on the idea of AI being a must have featureset, simple as that.

 

[SR 7]

No one cares for AI, not yet at least. Same way no one cares for the Vision Pro headset and now reports are that sales are literally at ZERO!

Apple can't innovate two things at once. It's one or the other. They spent all their time and money into the Vision Pro, that they fell behind AI so now need to use ChatGPT. They focused on Air tags and air pods and neglected the iPhone or iPad OS. They focused on the new iMac 24, so they discontinued the larger screen that everyone wanted. I have yet to see someone purchased or own an iMac 24".

Just like all of their other iOS softwares, whatever the AI offers won't be available until spring of 2025 as usual.

 

[antiprotest]

Right, especially when there won't actually be Apple Intelligence. We still don't know when any of it will be released. Meanwhile, all the other companies keep improving, rolling out new products and features. Even freaking Grammarly and Notion have had their AI features for many months now.

 

[Motawa]

Especially because it’s US only
Marketing page for every other country gonna look funny empty

 

[0815]

I was on the fence thinking about upgrading - I skipped last year (before that I did yearly upgrades via the upgrade program). After the dev conference, I thought this might be a good reason and planned to upgrade this fall. However, the more I think about it, I might delay until next year. First, my current phone still does everything I need, Second, not all features will be available right away, so I still might have to wait 1/2 - 1 year to get that functionality (still not sure if AI useful, but would like to play with it) ... so maybe its better to wait until everything is available before upgrading the phone for no good reason.

 

[senttoschool]

I don't know a single person outside of the tech community that sees AI as a selling point. Anecdotally I've actually observed the opposite.

ChatGPT has 200 million+ users.

 

[skitidetdu]

Especially when it is not coming to EU costumers in a forseeable time. Hoping for an inventory sweep of 15 pro when it is time to replace my Xr that is long in the tooth now.

 

[witchcult]

Lol, yeah I don't think anyone I know would buy a new iphone for this when theirs works perfectly fine. Hardly even know anyone that has a USB-C iphone

 

[Andres Cantu]

Tell that to the stock who seems not to care, Mr. Kuo. Even if I agree.

 

[jz0309]

AI as in Apple Intelligence will only become a factor once people use it And demonstrate how they benefit from it…
The current “genAI” is just a Wall Street and big consultancy hype and has yet to prove benefit for the average user

 

[secryt]

I would think it would boost iPhone 17 sales not 16.

 

[platinumaqua]

You think?

Anyway, I like the memory bump (if any) as a result of the "AI" for general use, but if the AI features can't be completely disabled so they are not utilizing any resources, the "gains" are nil.

 

[JPack]

Apple has said the dominant AI features won’t be available until 2025. Who’s buying 16?