Apple made a bold entry into the artificial intelligence arena on Monday with the unveiling of its new iPhone lineup, marking the company’s latest effort to turn emerging technology trends into cultural phenomena. The four iPhone 16 models are equipped with specialized chips designed to power a suite of AI tools, aiming to make Apple’s flagship product even more essential and reverse recent declines in sales.
These AI features are set to transform Siri, Apple’s often-criticized virtual assistant, into a smarter and more versatile companion. They promise to automate a variety of tedious tasks and deliver other attractive functionalities, such as creating personalized emojis within seconds. The announcement was met with a standing ovation at Monday’s event, where Apple CEO Tim Cook stated that the AI package would bring “innovations that will make a true difference in people’s lives.”
However, the full range of AI capabilities will not be available immediately upon the iPhone 16’s release, which is scheduled for September 20 with prices ranging from $800 to $1,200. Most of the AI features will be introduced through a free software update for iOS 18, the operating system for the new phones, from October through December. Initially, U.S. English will be the only language supported, with additional languages set to be included in an update next year, according to Apple.
This strategy follows Apple’s June developers conference, where the company previewed its new approach to build anticipation for the next generation of iPhones amid declining sales for the iconic devices. Since then, competitors like Samsung and Google have advanced significantly in AI, a technology expected to revolutionize computing akin to the original iPhone’s impact 17 years ago.
Apple is positioning itself to replicate its past success by betting on late but robust entry into the AI market, branding its in-device technology as “Apple Intelligence.” Despite this unique branding, the features mirror those found in Samsung’s Galaxy S24 released in January and Google’s Pixel 9 which came out last month.
PP Foresight analyst Paolo Pescatore noted, “Apple could have waited another year for further development, but initial take-up of AI-powered devices from the likes of Samsung has been encouraging, and Apple is keen to capitalize on this market.”
Apple aims to maintain its long-standing emphasis on privacy by ensuring that the majority of AI processing occurs directly on the device rather than relying heavily on cloud-based remote data centers. When server assistance is necessary, Apple assures it will be conducted securely with no personal data stored remotely. This move should mitigate, though not eliminate, security risks such as theft or hacking.
For users seeking access to more advanced AI tools, Apple is partnering with OpenAI to integrate capabilities from the popular ChatGPT chatbot. While the operating system upgrade introducing AI features is free, the chip required to run these technologies is only available in the iPhone 16 lineup and the high-end iPhone 15 models released last year, compelling most consumers interested in Apple’s AI to purchase a new phone—a prospect investors hope will boost sales during the holiday season.
This expected surge in demand is a principal reason Apple’s stock has risen by over 10% since June, with a slight increase on Monday following the initial dip during the iPhone showcase. Wedbush Securities analyst Dan Ives projected that the new AI-enhanced iPhones could push Apple’s market value past the $4 trillion mark next year for the first time, representing a nearly 20% increase from Monday’s closing stock price of $220.91.
In addition to the iPhones, Apple also introduced an updated version of its smartwatch, featuring sleep apnea detection, and the next generation of AirPods Pro, which will soon function as a hearing aid via an upcoming software update.
