Apple’s artificial intelligence features will push consumers to seek iPhone upgrades and be a boon for future sales, some analysts projected.
The tech giant, which is headquartered in Cupertino, California, said Monday it would incorporate "Apple Intelligence" into eligible iPhones, iPads and Mac devices later this year, aiming to "deliver intelligence that’s incredibly useful and relevant."
It made the announcement about its AI efforts, which had been highly anticipated by Wall Street and customers alike, while holding its Worldwide Developers Conference (WWDC). It also previewed new non-AI functions for the upcoming iterations of its various operating systems.
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Apple said Apple Intelligence will bring a bevy of AI-powered features to texting, calling, Siri and countless apps including Mail, Notes and Photos on devices that can support the technology. It will also introduce ChatGPT access for its "Writing Tools" feature and Siri this year.
"We believe Apple’s AI strategy will leverage its golden installed base around personalization and LLMs [large language models] on the phone that should change the growth trajectory of Cupertino as spur an AI driven iPhone upgrade cycle starting with iPhone 16," Wedbush Securities analyst Daniel Ives said in a research note after WWDC.
Goldman Sachs forecasted Apple Intelligence could promote more device upgrades too.
"Apple Intelligence will only be available on iPhone 15 Pro/Pro Max or iPad & Macs with M1 or better, which we view a catalyst for strong device upgrade demand starting with iPhone 16 this fall," Goldman analyst Michael Ng said in a research note.
Ng said he and other Goldman analysts were "encouraged by the financial implications" of both the new operating system and AI capabilities that Apple has in the pipeline.
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In addition to helping prompt more customers to upgrade their Apple devices, the Goldman research note said Apple’s various upcoming features should also "leave an opportunity for more direct AI monetization in the future" and "potentially mitigate compute costs by allowing users with paid ChatGPT accounts to link to Apple accounts."
Many Apple observers think the tech giant will unveil iPhone 16 models in the fall like it has done for iterations of its smartphone in past years. Its iPhone 15 lineup, for example, was officially introduced in September.
In the first quarter 2024, competitor Samsung climbed above Apple for global smartphone shipments with 60.1 million units, according to the International Data Corporation (IDC).
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The firm previously found in January that Apple led smartphone shipments in 2023, beating out Samsung and its 13-year streak of having the No. 1 position in the market.
Apple reported last month that its net sales of iPhones over the first two quarters of 2024 amounted to nearly $115.67 billion. That represented a slight decline of 1.2% compared to the same six month period in the prior fiscal year.
