Apple is gearing up to unveil its first series of iPhones specifically designed for generative artificial intelligence—technology that enables users to create text and images—at its annual hardware event, starting Monday at 1 p.m. ET. The event has been teased with the mysterious tagline “it’s glow time,” though Apple has yet to reveal what it signifies.
Apple faces pressure to prove the iPhone 16’s new AI features and updates are worth the upgrade, while also convincing investors it hasn’t fallen behind in the AI race against rivals with similar technology.
Since the iPhone 12’s 5G launch in 2020, there have been few compelling reasons to upgrade. Phone cameras already meet most daily needs, and higher screen resolutions often go beyond what the human eye can perceive.
As a result, iPhone sales, which make up half of the company’s revenue, have been sluggish.
The company’s shares had remained relatively flat until the unveiling of Apple Intelligence, indicating that investors are relying on AI to drive new iPhone sales. Since the June 10 event, Apple’s stock has risen by 14%. It has increased nearly 18% since the beginning of this year.
If Apple succeeds, it stands to profit significantly, as approximately 300 million iPhones worldwide have not been upgraded in over four years, according to a research note from Dan Ives, an analyst at the investment firm Wedbush, published last month.
So, while Apple will likely highlight changes to various products and services like AirPods or, even Apple TV+ on Monday, “everything is about the iPhone upgrade cycle. Everything else is subplot,” D.A. Davidson analyst Gil Luria told CNN.
“Subplot or main character, here is everything we’re expecting from the Apple event.”
AI iPhone
Apple has hinted that Apple Intelligence will enhance Siri conversations, draft emails, find moments in photos, and use personal information in responses. The company plans to demonstrate these features on Monday.
“Expect to see demos about how, within your text chain, you can get summaries,” Luria said. “You’ll know why did Tiffany M have beef with Tiffany R, and you’ll be able to ask that within the chat and get a response. Those are the kinds of things that will get people excited … to show some concrete examples of how folks will be able to use Apple Intelligence to do things they weren’t previously able to do.”
While new iPhones typically get updated processors, this year’s upgrade is crucial to meet the increased data demands of new AI features without affecting battery life.
Luria added that he thinks there could also be a subtle change to the appearance of the iPhone, such as a wider screen or updated edges, “to drive home the point of an upgrade cycle.”
“Something distinct about the new iPhones that will communicate to consumers that, ‘I have the new iPhone and you don’t,’ which was not the case for the last four years,” he said.
The iPhone 16 is also set to feature a dedicated camera button, according to a report from Bloomberg’s Mark Gurman.
Big Question: Price?
A key question leading up to Monday’s event is how Apple will price the iPhone 16 lineup. Over the past four years, the starting price for new iPhone models at launch has been $799. While Apple fans have long debated whether iPhones should be more affordable, investors typically favor maximizing profits.
Many analysts, such as Angelo Zino from CFRA Research, suggest that Apple might implement a modest price increase “across the board” for the iPhone lineup, citing the new AI features and the associated costs of providing them.
However, it almost certainly won’t be a major hike because “they don’t want to lose the (customer) enthusiasm because of sticker shock,” Luria said.
Other Devices
According to rumors, Apple may also unveil updates to the Apple Watch and AirPods. The Apple Watch Series 10 is anticipated to be thinner than previous models while featuring a larger screen. Additionally, the company is expected to introduce new low-end and mid-tier AirPod options, according to a report by Gurman, citing anonymous sources familiar with the matter.
These updates will build on the new software features for both devices that Apple unveiled at its annual developers conference in June. AirPods users will soon be able to answer or decline calls with a simple nod or shake of their head. Furthermore, the Apple Watch will offer enhanced vital sign tracking, notifying users of potential illness based on indicators like body temperature and heart rate.
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