Market Analysis

On Monday, Apple revealed its much-anticipated AI-enhanced iPhone 16 and announced upcoming improvements to its Siri personal assistant, with new software set to enter a test phase next month.

"The next generation of iPhone has been built with Apple (NASDAQ) Intelligence at its core, marking the start of an exciting new era," CEO Tim Cook declared during the product launch.

Apple’s stock closed nearly unchanged at $220.91. The unveiling coincided with Huawei’s impending launch of its tri-fold phone, highlighting the growing competition for Apple. The company has yet to disclose an AI partner in China to support the iPhone 16.

Global tech firms are racing to integrate AI into products, and smartphones are emerging as a key competitive field. Apple hopes that these AI features will entice users to upgrade, even as iPhone sales slow.

Apple Intelligence, the company's AI platform, will not only enhance Siri but also improve functionalities like object recognition via the phone’s camera, according to company executives.

A beta version of Apple Intelligence will be available in U.S. English next month, with additional English variants slated for December, followed by other languages such as Chinese, French, Japanese, and Spanish in 2024. Siri improvements and other features will roll out gradually, though Apple did not specify a timeline for moving beyond the test phase.

The iPhone 16 and 16 Plus will be priced similarly to their predecessors, boasting a new chip and aluminum frame. One notable hardware feature is a customizable button for controlling the camera, though the phone’s overall design remains familiar.

The premium 16 Pro and 16 Pro Max models, crafted from titanium, offer expanded AI capabilities. These include suggestions for optimizing photo shoots and audio-editing tools aimed at professional-level video production.

Apple’s latest chips, built on Arm’s new architecture, incorporate enhancements specifically designed to accelerate AI-driven applications.

"Users with iPhones that are three to four years old will likely find this upgrade appealing, even if some features are delayed. It helps future-proof their devices for AI advancements," noted International Data Corp analyst Nabila Popal.

However, several experts believe that delays in certain features may cause potential buyers to hold off initially.

"People might wait to see how well these features perform before making a purchase. I don’t expect the same rush we’ve seen in past years," said TECHnalysis Research founder Bob O'Donnell.

In contrast, Huawei’s website on Monday indicated over 3 million pre-orders for its Z-shaped tri-fold phone ahead of its formal release, highlighting the Chinese company’s ability to thrive despite U.S. sanctions and solidify its position against Apple in China, where demand for AI-driven features is strong.

Watches and AirPods

Apple also introduced new versions of its Watches and AirPods, emphasizing health-focused upgrades and hardware improvements. The Watch now offers capabilities to detect long-term health issues like sleep apnea and respond to emergencies such as falls.

As for the updated AirPods, Apple revealed hearing-aid functionalities, which are currently awaiting regulatory approval in the U.S.

Globally, Apple enthusiasts have been eagerly awaiting the AI-enabled iPhones. Last year, iPhone sales accounted for over half of Apple’s $383 billion revenue.

"While Android devices might already feature some of these innovations, Apple’s ability to package and market them to a broader audience gives it an edge," commented D.A. Davidson analyst Gil Luria.

However, Apple faces unique challenges in China.

"Apple fell out of the top five smartphone vendors in China during the second quarter," said eMarketer’s senior technology analyst Gadjo Sevilla. "For the first time, Chinese smartphone brands dominated the top five spots. Given that Apple Intelligence still requires approval from Beijing, it may not immediately drive adoption in the region."

Earlier this year, Apple reduced prices in China, reacting to increased competition and government regulations.

Although the iPhone 16 lineup is the first to be built around AI features, some of these capabilities will also be made available on the iPhone 15 Pro and Pro Max, the previous generation's high-end models.

Competitors like Alphabet (NASDAQ)’s Google are also pushing AI-focused advancements to challenge Apple’s dominance in the premium smartphone market.

In August, Google highlighted AI-powered features like Gemini Live, enabling live voice conversations with a digital assistant on its Pixel smartphones. Many of these AI innovations were simultaneously made available to Android-based devices from manufacturers such as Samsung (KS:005930) and Motorola (NYSE).

Apple, however, postponed the release of its AI-driven features in Europe due to compliance with European Union technology regulations, announced just a week after its developer conference in June.

Meanwhile, Huawei has scheduled the formal launch of its Mate XT Z-fold phone for Tuesday in China.

Paraphrasing text from "Reuters" all rights reserved by the original author.