- Apple is leveraging AI technology, specifically Apple Intelligence, to revitalise sales and attract new customers amidst declining consumer spending and increased competition.
- The new AI features are exclusive to the iPhone 15 Pro or Pro Max models, launched in September 2023, and are expected to drive a major upgrade cycle as users seek to access the personalised emojis, text conversion, email enhancement, and Siri’s ChatGPT assistance.
- Analysts predict a significant opportunity with an estimated 270 million iPhones not being upgraded in the past four years, estimating that over 15% of Apple’s installed base will upgrade to iPhone 16 for the Apple Intelligence tech.
OUR TAKE
Apple’s strategic use of AI to enhance its products shows a promising shift toward personalised and innovative features, potentially driving a significant upgrade cycle among its loyal customer base. By leveraging AI technology in its new lineup of smartphones, Apple aims to revitalise sales and stay competitive in the evolving tech market.
—Crystal Feng, BTW reporter
During Apple’s developer conference on Monday, the focus extended beyond integrating cutting-edge artificial intelligence technology, such as ChatGPT, into its software. The event also emphasised the company’s goal of increasing iPhone sales.
Apple leverages AI to revitalise sales amidst declining consumer spending
In the face of fluctuating consumer spending and increased competition from tech rivals, Apple has turned to AI as a strategy to reinvigorate its extensive base of over 1 billion loyal customers and reverse a recent decline in sales of its flagship product.
The software, compatible with at least an iPhone 15 Pro or Pro Max, is expected to stimulate a surge in new purchases, according to analysts. Many anticipate the most significant upgrade cycle since the 2020 launch of the iPhone 12, which attracted customers in part due to its 5G capabilities.
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Analysts predict major upgrade cycle driven by new AI features
“What we saw today was more compelling than anything we’ve seen since,” analyst Gil Luria of D.A. Davidson said.
Apple introduced Apple Intelligence, its version of generative AI capable of creating text, images, and other content upon request. The company showcased how this AI can produce personalised emojis, convert a cartoon into text messages, or enhance the professionalism of emails. Additionally, Siri can now offer ChatGPT’s assistance to users.
To access this AI technology, users will need to upgrade to the iPhone 15 Pro or Pro Max, launched in September 2023. The AI is designed to process data locally on the user’s device and relies on the advanced chips found in Apple’s latest smartphones.
According to Wedbush Securities analyst Dan Ives, this presents a significant opportunity as an estimated 270 million iPhones have not been upgraded in the past four years.
“We estimate 15%+ of the Apple installed base will upgrade to iPhone 16 as Apple Intelligence is the killer app many have been waiting for,” Ives said.
