In This Story
Read more: Apple’s iPhone 16 event kicks off ‘a historic week’ for the tech giant
Apple AAPL+0.31% is expected to unveil its shiny new iPhone 16 models at its annual event on Monday, phones that will come loaded with the latest operating software capable of supporting the tech giant’s splashy foray into the world of artificial intelligence.
In June, Apple finally unveiled its first AI initiative, known as Apple Intelligence — a set of AI-powered features for Safari, Notes, Calculator, and, most notably, Siri for the iOS 18, iPadOS 18, and macOS Sequoia.
The integration of AI into Apple’s popular devices will allow users to customize their home screens even more, get better answers from its voice assistant, and even access ChatGPT directly from their device, among other new features.
Analysts have high hopes for the fresh tech, which will be one of the biggest operating software advances that Apple has introduced in years. Goldman Sachs analysts led by Michael Ng said in a research note in June that the AI-capable features will be a catalyst for strong upgrade demand for its latest models.
That’s especially true given that the AI features, which are expected to launch as a software update in beta form in October, are only available on iPhone 15 Pro models or higher. The upcoming iPhone 16 is expected to come with iOS 18 pre-installed. (The full slate of Apple Intelligence features may not make it onto iPhones until early 2025, Bloomberg reports.)
Goldman said the iPhone 15's strong performance, which sold better than the previous model in the same amount of time since its launch, could point to strong Apple Intelligence driven-demand. Researchers at the investment bank believe that Apple’s forecasted 5% year-over-year revenue growth in the fourth quarter implies strong iPhone revenue growth — and strong demand for the upcoming iPhone 16.
The iPhone maker is long overdue for a turbocharged upgrade cycle: Some 300 million iPhones worldwide have not been upgraded in more than four years, according to estimates by investment firm Wedbush.
Meanwhile, fewer than 10% of current iPhone users would be able to use the new AI features, with more than 40% of Apple’s 800 million-plus smartphones being iPhone 12 or older, a Bloomberg analysis shows.
Wedbush analysts, led by Dan Ives, said in a report last month that Apple Intelligence will mark the beginning of the “consumer AI revolution,” with upwards of 240 million iPhones potentially being sold in the 2025 fiscal year as a result of the AI-driven upgrade cycle.
And it could be a major boon to Apple’s market value, which has risen more than 20% so far this year. Wedbush analysts said Apple’s AI technology could add between $30 to $40 per share, resulting in more than $4 trillion in added market capitalization for the tech giant.
Apple’s entrance into the AI race has been slow coming. The Cupertino, California-based company stayed silent about its AI strategy for a year and a half, as OpenAI launched its wildly popular AI chatbot ChatGPT in late 2022, followed by Google, Microsoft, and Meta. And Microsoft’s and Google’s AI tools are already boosting sales at the two companies.
Other than AI, the iPhone 16 Pro & Pro Max are rumored to have larger screens, and could come in a new bronze-toned matte color, potentially named “Desert Titanium.”