Apple Intelligence Isn't Driving iPhone Upgrades
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.
The delay between the Apple Intelligence introduction in June 2024 and a launch even after iPhone 16 models came out was a contributing factor, and Apple Intelligence "appeal has significantly declined" compared to cloud-based services like 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.
All in all, Kuo does not feel that Apple Intelligence is going to benefit Apple in terms of user upgrades or revenue, but there's some hope for the long-term prospects.
I'm not bearish on Apple Intelligence's long-term prospects; however, given the points discussed above, there is no evidence of Apple Intelligence's ability to benefit hardware replacement cycles or service business. As such, it should be cautious of potential downside risks created by earlier market over-optimism.
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.
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