Apple picks the low-hanging fruit in iPhone unveil: Morning Brief

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Apple’s (AAPL) unveiling of the iPhone 16 Monday shows the company is sticking to the basics when it comes to new product launches rather than diving headfirst into the AI horse race.

As our Dan Howley noted, the company is shooting its AI shot carefully, slowly, and deliberately, lest its AI, dubbed Apple Intelligence, make a bad first impression and poison the AI well.

But read another way, Monday’s presentation showed a company unwilling to rush tech it hasn’t found the right use for — and in the meantime is doubling down on its marketing and user-experience prowess, making the banal suddenly seem compelling.

Alongside the slick but incremental-feeling AI features, the company launched AirPods with hearing aid functionality, an Apple Watch that now can detect sleep apnea, and a phone with a satellite connection for emergencies, wrapping three long-standing tech devices in a package of its signature branding, instinctive user experience, and already well-known products.

It’s as if the company is picking low-hanging fruit instead of trying to prematurely cull the still-ripening AI crop hanging from the canopy’s branches.

Apple has been trying to figure out its next moves since at least 2016, when sales of the iPhone began to level out as people started to keep their old phones, which were still working just fine. Incremental improvements in camera and screen quality stopped being noticeable — and certainly weren’t asked for. The yearly chorus of “best battery ever” stopped hitting as hard when batteries actually kept working after the two-year mark.

With its hardware working too well to be replaced, Apple had to lean into other parts of its growing suite of offerings, especially services.

Investors hope that artificial intelligence will solve the hardware sales problem for Apple, as they hope the technology will do for a suite of other things. But many still see the current and near-term embodiments of AI as a solution in search of a problem — cool functionality, perhaps, but with a currently nebulous use case for most businesses, let alone consumers.

The two buzzy letters got plenty of attention, but the event’s shared billing of AI and the suite of safety features makes it clear that Apple is keeping its portfolio diverse, AI expectations managed, and focus firmly on the company’s ecosystem and services. As Bank of America analyst Wamsi Mohan wrote, the new devices “focus on driving more users to the ecosystem,” and while the phones cost the same (a nod to tamed inflation?), the sat phone feature will become another revenue stream once the free two-year trial ends.

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Apple has long been the GOAT in taking challenging technology and putting it into a consumer-friendly wrapper. Computers, MP3 players, tablets, phones, smartwatches, smart TVs, wireless headphones — it’s an all-time record.

AI may also be in this category, existing already but for the most part being a B2B conversation. But as Apple well knows, so are an array of decades-old tech products that have never quite made it into the consumer space.

I had to dig a hole the other day and found a pipe in the way. I look forward to the iPhone 17’s metal detector.

Ethan Wolff-Mann is a Senior Editor at Yahoo Finance, running newsletters. Follow him on X @ewolffmann.

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