Entrepreneurs

AI Is Apple’s Best Shot at Getting You to Upgrade Your iPhone

This trend bears out in secondary market data: Shipments of used smartphones increased nearly 10 percent, to 309.4 million shipments, in 2023, up from 282.6 million units the year prior, according to research firm IDC. For a lot of people, a good phone really is just good enough.

Apple is also selling privacy as part of its generative AI package, saying that Apple Intelligence “is integrated into the core of your iPhone, iPad, and Mac through on-device processing.” Apple’s AI tools use Apple-developed large language models, instead of relying on another entity’s models or a patchwork of LLMs, as confirmed by Axios. In instances where an iPhone isn’t capable of processing a user’s actions or queries on their device, Apple Intelligence will send the user’s data to a server running on Apple silicon, which will keep that user’s personal data secure, the company says.

Which raises the question: If Apple is already planning to offload some of the processing to its cloud, then couldn’t a slightly older iPhone—like the iPhone 14 Pro, which is powered by a slightly older chip—also get the AI glow-up?

Michael Gartenberg, a consumer technology analyst at Flash Advisory & Research who previously worked at Apple, says he can’t technically say at this point whether Apple “is being disingenuous about what devices can run this. But I do know iPhones can already run ChatGPT and an awful lot of Google’s AI features, so I suspect this is the opportunity Apple has been waiting for to tell you that the iPhone 13 really isn’t good enough anymore,” he says.

Another question the introduction of Apple Intelligence raises, pertaining to iPhone sales, is whether it gives consumers a reason not to buy an iPhone before this upcoming fall, Gartenberg says, which stalls the current iPhone buying cycle. (And that’s assuming buyers want the generative AI features at all; Pew survey results suggest Americans are slightly more concerned than excited about generative AI.)

And, since Apple Intelligence will be available only in US English to start, it’s unlikely to immediately boost iPhone sales elsewhere—like in China, one of Apple’s most important markets—unless Apple does some critical “futureproofing,” says Carolina Milanesi, founder of the research firm Heart of Tech.

“It depends on how they roll out experiences to other countries,” she says, like if AI-generated Genmoji are offered as a feature before text editing or other language-based features. “The bigger update cycle will happen next year, when more languages are added,” Milanesi predicts. And in China specifically, Apple has to not only develop language support but determine how it will handle data storage, she says.

Either way Apple now has a new way to compel iPhone buyers to upgrade come September. This time it’s not just selling them on a new camera jammed into the same container; it will undoubtedly try its hardest to convince customers that any newer iPhone is a much smarter smartphone, one that offers a flavor of generative AI much more palatable than the AI chat platforms still in search of application.


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