As of this week, users in the USA can use “Apple Intelligence”. Early signs suggest that AI could actually boost business with the 17-year-old iPhone.
Apple is touting its new iPhone as an AI smartphone.
Florence Lo / REUTERS
It was good news that Apple gave its shareholders on Thursday could present: Between July and September, the iPhone group generated $46.2 billion in sales from smartphones alone; more smartphones were sold in every region of the world – a total of 6 percent more year-on-year.
If the iPhone is booming, Apple is booming too, because the smartphone accounts for almost half of the company’s sales. And indeed sales grew by 6 percent to an all-time high for the September quarter of almost $95 billion. However, profits fell due to a recent EU court ruling that forced Apple to pay back taxes in Ireland of $14.3 billion plus interest. The profit was therefore just under $15 billion (minus 35 percent year-on-year).
The numbers were particularly pleasing for Apple because they are an initial indicator that the company’s AI strategy could actually work and is being welcomed with open arms by customers.
Because the smartphone plays a key role in Apple’s in-house AI strategy, which the company calls “Apple Intelligence”. This is intended to turn our smartphones into smart assistants that talk to us naturally, write for us and complete tasks for us.
Since Monday of this week, Apple’s customers in the USA have been able to use the company’s AI functions – provided they own an iPhone model 15 Pro, 15 Pro Max or 16. Only these models have the ultra-fast chips built in that are used for AI calculations needed. The AI functions are part of the new iOS 18.1 operating system. This is how they also work on the latest versions of iPad and MacBook.
According to the market research company IDA, consumers not only bought the brand new iPhone 16 in the last quarter in anticipation, but also specifically the discounted iPhone 15 Pro and 15 Pro Max. This is a second indicator that the demand for “Apple Intelligence” is actually should be big.
Customers test the iPhone 16 in New York City.
Ted Shaffrey / AP
A third indication is that users in the USA apparently jumped on Apple Intelligence on Monday: As Cook described in the phone call with investors, twice as many users had already installed the new operating system 18.1 as the previous one.
But is “Apple Intelligence” actually that much better? These are currently all functions that are already known from the AI offerings from Open AI, Google, Microsoft and others: The AI lets users remove unwanted objects from photos and generates videos. It summarizes emails, documents and entire conference calls and helps with writing and streamlining texts.
Apple’s voice assistant Siri has also become smarter: you can now ask follow-up questions and also communicate with Siri in writing. However, it will still be months before Siri can interact with third-party apps – and, for example, order a taxi or reserve a table for the user.
None of the features are revolutionary. The cell phone manufacturer Samsung presented such offers in its AI smartphone in January. But CEO Cook is not interested in being the first, but in being the best, as he recently did in a big one Interview with the “Wall Street Journal Magazine” emphasized.
“This is just the beginning,” promises Cook
Whether Apple’s AI features will actually be the best remains to be seen. The group wants to add more and more new ones in the coming months. “This is just the beginning,” he repeated again and again on Thursday.
Above all, Apple stands out from the competition by promising to protect the privacy and data of its users much better than the competition. Many of the requests should be processed on the device itself and not in a data cloud. Given the wealth of information we all have on our smartphones, this promise could actually retain users.
Can AI give a boost to the 17-year-old iPhone?
The key question, however, remains whether “Apple Intelligence” actually heralds an “upgrade cycle” for the company – i.e. whether the new functions are tempting enough for users to trade in their old iPhones for new, AI-enabled models in droves.
The current quarter will be informative, especially December, Apple’s strongest sales month. Cook expressed confidence that AI would boost the iPhone business “just in time for the holiday season.”
In December they want to launch further functions of “Apple Intelligence”: Then the chatbot Chat GPT will be integrated into the operating system, and then there will be further, even more powerful writing aids. The AI will also then be available in other English-speaking regions of the world such as Canada, Great Britain and Canada.
Investors seem as confident as Cook: Since the company presented “Apple Intelligence” in June, the share price has risen by 18 percent or a cumulative $500 billion. With a stock market valuation of 3.4 trillion, Apple is currently once again the most valuable technology company in the world. At least that’s what “Apple Intelligence” has already achieved.
