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Apple’s AI bet isn’t the silver bullet the company needs

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5 months ago

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Apple’s AI bet isn’t the silver bullet the company needs

Apple made waves in the tech industry on Monday when it unveiled its new artificial intelligence system, Apple Intelligence.

Although the Worldwide Developer Conference keynote revealed some features that have been long-awaited — like AI — and others that came as a surprise, it doesn’t mean Apple Intelligence is enough to attract new customers.

In fact, if analysts’ predictions are accurate, no one should expect astronomical results from this announcement in 2024.

One of the main reasons is that Apple Intelligence — and the rest of the updates the company announced — will only be available in its next software updates, iOS 18, iPadOS 18, and Sequoia, its operating system for computers. And if you want to use Apple Intelligence on your iPhone, you’ll have to have an iPhone 15 Pro or later model.

So, while some see this as an opportunity to supercharge iPhone growth, and while dedicated Apple fans might be especially motivated to upgrade to the newest models if they want the full capabilities of AI, an Android user might not feel the same spark that would make them enter the Apple ecosystem.

Monday’s announcements were impressive enough to “stanch some of the device revenue that’s been hemorrhaging lately, but there isn’t enough to create a new band of followers,” Dipanjan Chatterjee, vice president and principal analyst at Forrester, said.

New features in iOS 18, like email summarization and a more customizable home screen, are already offered by Apple’s competitors. Meanwhile, existing Apple owners may already be using established chatbots like OpenAI’s ChatGPT as apps on their devices. And many of the more advanced AI features will only be available in American English at first, which doesn’t bode well for foreign markets, Bloomberg reported.

Apple Intelligence is a multi-year strategy that will likely take time to pay off fully — but the company is “taking the right path,” according to a note from Wedbush Securities analysts.

Still, while the note said, “Apple’s AI strategy will leverage its golden installed base” of a massive 2.2 billion iOS devices, there’s still no clarity on whether anyone will actually ditch their Samsung for an iPhone.

New customers might not be a big deal to all investors, however. Morningstar tech analyst William Kerwin told Business Insider that it’s “more about incentivizing existing customers to spend more and upgrade into the new phones” than bringing in new buyers.

“And we think these announcements are enough to drive that. But we don’t think it will be seismic, hence our 2-star rating,” Kerwin added.

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