In case you wanted extra proof that folks aren’t upgrading their telephones on the tempo they used to, try Apple’s just-reported financials for the March quarter. Throughout the three-month interval to start out 2024, Apple racked up rather less than $46 billion in telephone gross sales — and nonetheless noticed a ten% falloff in iPhone gross sales from the identical interval a 12 months in the past.
There is a caveat to that determine. The earlier 12 months noticed lots of deferred iPhone 14 gross sales as a consequence of provide chain points, and in case you accounted for that anomaly, Apple’s iPhone gross sales within the current quarter would have been flat. Nonetheless, it is fairly clear that for all its strengths, the iPhone 15 just isn’t inspiring an enormous wave of upgrades.
Can the iPhone 16 change that when the 4 new fashions supposedly in improvement arrive this fall? Whereas Apple is not giving forecasts that far out, executives do appear assured that they’ve one thing within the works that would make stronger its telephone enterprise. And the iPhone 16 is positioned to profit from that.
The final massive iPhone improve wave
Earlier than we take a look at why the iPhone 16’s prospects could also be trying up, it helps to recollect the final time an iPhone launch encourage an enormous wave of upgrades. That will be the discharge of the iPhone 12 again in 2020.
For the vacation quarter of Apple’s 2021 fiscal 12 months — the primary full quarter of gross sales for the iPhone 12 — the corporate noticed telephone income develop 17% to an all-time document of just below $65.6 billion. That document would fall a 12 months later when the iPhone 13 launch pushed Apple’s vacation quarter telephone gross sales to $71.6 billion.
These fashions had one thing missing from earlier iPhone releases — 5G connectivity. The iPhone 12 was the primary Apple telephone that would hook up with the quicker mobile community, and the iPhone 13 expanded upon that functionality with higher energy administration options to deal with the battery calls for of 5G. In case you wished improved community efficiency, you doubtless upgraded to a type of two fashions, and it is unlikely you’ve got regarded again since, even with subsequent enhancements to the iPhone 14 and iPhone 15 lineups.
I converse from expertise right here. My on a regular basis telephone continues to be an iPhone 12, which reveals no indicators of slowing down almost 4 years after its launch. The A14 Bionic system-on-chip powering the telephone can deal with no matter I throw at it, and I can nonetheless make it from daybreak to nightfall with out having to discover a charger. Digicam high quality has positively improved through the years, as I came upon in an iPhone 15 vs. iPhone 12 digicam face-off, however my older iPhone nonetheless takes footage which can be ok for my tastes.
I am prepared to wager that different folks toting round both an iPhone 12 or iPhone 13 discover themselves in the identical boat — newer iPhones could have extra to supply, however not a lot that we really feel compelled to pay flagship telephone costs for a brand new mannequin. So how does Apple persuade us that this 12 months is the 12 months to lastly transfer on from our older iPhones?
AI arrives
“We imagine we’ve got benefits that may differentiate us on this new period [of generative AI], together with Apple’s distinctive mixture of seamless {hardware}, software program, and providers integration, groundbreaking Apple Silicon with our industry-leading neural engines, and our unwavering deal with privateness.”
— Tim Cook dinner
The reply to that query could also be one which lots of tech firms are turning to as of late — AI. Most observers anticipate Apple to make AI-powered includes a centerpiece of this 12 months’s iOS 18 software program replace for iPhones. And whereas Apple would not touch upon future merchandise, it isn’t doing loads to dismiss that assumption, both.
In reality, Tim Cook dinner emphasizing Apple’s behind-the-scenes efforts in working with generative AI have grow to be a staple of the CEO’s public feedback as of late. On this week’s name with Wall Avenue analysts to debate Apple’s monetary efficiency, Cook dinner as soon as once more recommended that an announcement concerning AI was imminent.
“We proceed to really feel very bullish about our alternative in generative AI,” Cook dinner informed analysts. “We’re making vital investments, and we’re trying ahead to sharing some very thrilling issues with our prospects quickly.”
However that is not all of the Apple CEO needed to say. “We imagine we’ve got benefits that may differentiate us on this new period, together with Apple’s distinctive mixture of seamless {hardware}, software program, and providers integration, groundbreaking Apple Silicon with our industry-leading neural engines, and our unwavering deal with privateness, which underpins every thing we create,” Cook dinner added.
You would not be going out on a limb to conclude that sounds an terrible lot like a preview of AI integration into the iPhone by way of iOS 18. Already, rumors are tipping that software program replace so as to add options like auto-generated playlists within the Apple Music app, recommended decks within the Keynote presentation app, writing prompts for Apple’s Pages, and AI-powered summaries of every thing from textual content messages to net pages. There’s additionally the potential for a souped-up Siri that is able to dealing with advanced requests than the present model of Apple’s private assistant.
We’ll discover out for sure what AI options are deliberate for iOS 18 throughout WWDC 2024, the place Apple is anticipated to supply a preview of this 12 months’s software program updates for the iPhone in addition to for the Mac and different units. And whereas that June convention will go a great distance towards filling within the particulars about how AI suits into the iPhone story, there are nonetheless going to be some lacking items to determine.
AI and iPhone 16
Particularly, we can’t know till the autumn if there are any iPhone 16-exclusive AI options coming with this 12 months’s up to date telephones. iOS 18 ought to AI capabilities to present iPhones — the software program replace is tipped to run on the identical units that may run iOS 17. And with Apple anticipated to favor on-device AI capabilities over cloud-powered options, it is unclear what the iPhone 16 may supply that you may’t get on certainly one of Apple’s present fashions.
I believe there could also be one thing that is iPhone 16-specific, although we would not discover out what till the brand new telephones are proven off within the fall. On the very least, you’d anticipate the A18 chipsets slated for the iPhone 16 fashions to be able to supporting any Apple-built chatbot that is developed in a while. (Most iOS 18 rumors counsel that Apple will not add its personal chatbot with this software program replace, turning as an alternative to ones from the likes of Google or ChatGPT.)
Even when there is no distinctive AI capabilities slated for the iPhone 16, Apple will doubtless be capable to level to different enhancements to tempt would-be upgraders. In addition to the A18 chipset — which is tipped to look on all iPhone 16 fashions and never simply the Professional units — the iPhone 16 Professional may supply Wi-Fi 7 assist for quicker connectivity in addition to a slew of digicam upgrades. The usual iPhone 16 might add the Motion button that made its debut on the iPhone 15 Professional, whereas all fashions are rumored to betting a brand new Seize button to assist with pictures and movies.
In different phrases, Apple could make the pitch that not solely will you get AI-powered options with the iPhone 16, you possibly can anticipate a number of {hardware} upgrades as properly.
iPhone 16 outlook
Whether or not that will probably be sufficient to immediate a flood of upgrades this fall will not be identified till iPhone 16 pre-orders open up. However heading into the primary massive step of the method — June’s iOS 18 preview — Apple sounds prefer it’s assured that it has all of the items in place.