The inclusion of artificial intelligence in the upcoming iPhone models is expected to drive a significant increase in sales, according to optimistic analysts. While hardware upgrades have historically been the main attraction for consumers, the focus is now shifting towards how Apple’s hardware, particularly its custom chips, will enhance the capabilities of advanced AI features. Analysts like Paolo Pescatore believe that regardless of the immediate availability of Apple Intelligence, the new iPhones are future-proof and will set the stage for an iPhone supercycle. Pescatore emphasizes that Apple’s expertise in silicon, hardware, and services will converge to bring Apple Intelligence to life, potentially revitalizing customer interest in features like Siri.
Skeptical Views on the Supercycle Hype
However, not all analysts are convinced of the anticipated supercycle driven solely by AI advancements. Anand Joshi, a former tech executive turned analyst, points out the technical limitations of older iPhone models as a key factor motivating upgrades. Joshi remains skeptical of the user experience offered by AI features and predicts only a 50-50 chance of a supercycle occurring. Similarly, Varun Mishra of Counterpoint Research views the upcoming iPhone releases as a revenue step-cycle rather than a significant supercycle, especially with the staggered rollout of AI features. He suggests that the new use cases enabled by Apple Intelligence may not be compelling enough to drive early upgrades among a large user base.
Challenges in the Chinese Market
The potential impact of AI-powered iPhones on sales in China raises additional concerns, given the market’s significance to Apple both in terms of sales and production. Recent reports of Chinese officials limiting the use of foreign-made electronics, including iPhones, within government agencies could have a long-term effect on Apple’s brand in China. There are also questions surrounding the operation of Apple’s Private Compute Cloud in China, considering the country’s regulatory environment. Despite these challenges, Apple announced plans to expand its AI features, including Chinese language support, starting next year. Analysts like Joshi believe that China’s demand for iPhones will persist, emphasizing the importance of establishing partnerships to enable AI innovations in the region.
The integration of artificial intelligence into the iPhone ecosystem represents a significant shift in Apple’s product strategy, with the potential to redefine the user experience and drive sales growth. While some analysts remain skeptical of the immediate impact of AI on iPhone sales, the long-term implications of advanced AI features cannot be underestimated. As Apple continues to innovate and expand its AI capabilities, the future of iPhone sales will be closely tied to the company’s ability to navigate the evolving tech landscape and address unique market challenges, such as those present in China. Ultimately, the success of AI-powered iPhones will hinge on Apple’s ability to deliver compelling user experiences and forge strategic partnerships to drive adoption and growth.