Some of those features won’t be available until next year, but bullish analysts say Apple’s push to add AI to the iPhone will likely continue to drive sales growth. While in years past the main draw was the iPhone’s hardware improvements, the lure now is how Apple’s hardware, like its custom chips, will serve advanced AI.
“Regardless of whether Apple Intelligence is supported from day one, the new iPhones are future-proof,” says Paolo Pescatore, an analyst and founder of PP Insights. Pescatore, like Ives, believes this is the beginning of an iPhone supercycle. “Apple’s prowess in silicon, hardware, and services will come together to revitalize Apple Intelligence.”
Pescatore adds that Siri needed a major overhaul and thinks iPhone customers might now be willing to give Siri a second chance.
Apple did not immediately respond to questions about the company’s potential to grow iPhone sales.
Super Unknown
Other analysts don’t buy the hype about a supercycle. Anand Joshi, an engineer by trade and former technology executive who is now an analyst at TechInsights, says the technical limitations of older iPhone models will likely spur improvements. But he believes there’s only a “50-50 chance of a supercycle.”
“The biggest driver will be AI, but I’m still skeptical about user experience,” Joshi says.
“Most of the use cases that Apple Intelligence provides are generally ‘nice to have’ and not compelling enough to cause a large portion of users to upgrade their devices sooner than expected,” Mishra says. “We also don’t see any pent-up demand, like the demand in previous supercycles, for genAI features among consumers.”
There is also the question of whether these recent AI-enabled iPhone models will spur sales in China, one of Apple’s most critical markets for iPhone sales and production.
Last fall, The Wall Street Journal reported that Chinese officials had ordered government agency employees stop using your iPhones and other foreign electronics to work, which does not affect the majority of China’s population but could have a long-term “chilling effect” on the Apple brand in China. As Apple introduces more AI features that rely on both on-device processing and data sent and received from the cloud, questions have arisen How exactly will the company’s private cloud computing work in China?. Apple has not yet provided details on how this technology will work.
This morning, during its iPhone launch, Apple announced that it plans to expand AI features to other languages, including Chinese, starting next year.
TechInsights’ Joshi says he doesn’t believe the Chinese government’s crackdown on iPhones is having any impact at this point. “China will continue to buy iPhones,” he says.
Ives believes the key to Apple’s success in this market will be something out of the ordinary for a company that prides itself on its end-to-end technology and tightly controls the experiences it delivers: “Securing a Chinese partner will be key for Apple to enable AI in China,” he says.