Apple Intelligence hasn't convinced people to buy an iPhone 16, Apple analyst Ming-Chi Kuo said today. According to Kuo, a supply chain survey suggests Apple Intelligence is not pushing people to upgrade their devices.
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The gap between the introduction of Apple Intelligence in June 2024 and its eventual release, which followed the launch of the iPhone 16 models, played a significant role in its diminished popularity. As a result, the appeal of Apple Intelligence has notably decreased when compared to cloud-based services such as ChatGPT.
There is also no indication that Apple Intelligence will drive Services revenue, as Apple CEO Tim Cook said in December that Apple has never discussed charging for Apple Intelligence. Bloomberg's Mark Gurman said that Apple could start charging for Apple Intelligence in 2027 or beyond, but it remains to be seen if that will happen.
In summary, Kuo believes that Apple Intelligence is unlikely to enhance Apple's user upgrade rates or revenue in the short term; however, there is some optimism regarding its long-term potential.
I remain optimistic about the long-term potential of Apple Intelligence; however, the reasons mentioned previously indicate a lack of evidence supporting its capacity to capitalize on hardware replacement cycles or the service sector. Therefore, it would be wise to be wary of possible downside risks stemming from prior market over-enthusiasm.
Apple Intelligence was the main focus of iOS 18, but when the iPhone 16 models launched in September, there were no Apple Intelligence features available. Writing Tools and other capabilities came in the first update to iOS 18 in October, but Image Playground and Genmoji didn't roll out until December.
There are still Apple Intelligence features that have not been implemented, including major changes to Siri that are rumored to be coming in April.
A December survey suggested that many iPhone users feel that Apple Intelligence has added little or no value to their iPhone experience, though that sentiment could change as Apple Intelligence matures.
