The Slow Build to the aiPhone
Mark Gurman
The point of Mark Gurman's newsletter this week is that it's unlikely that the iPhone upgrades set to be announced later today will kick off a "supercycle" – that is, a spike in iPhone sales. In modern times (meaning, post-iPhone 4), these tend to happen when Apple upgrades the body of the device so that it looks different (think: bigger screens or, of course, the iPhone X). And given that the iPhones 16 won't look different (though the Pro models will have slightly larger screens), no surprise here, right? Except this year, a bunch of analysts had been hoping for this "supercycle" simply because of the buzz around AI. And the fact that AI needs newer, faster devices on which to run smoothly – to the point that Apple is limiting such functionality to the iPhone 15 Pro models and beyond (which includes, yes, all new iPhone 16 models).
In other words, if you want AI, you either need to have sprung for a Pro model iPhone last year, or you'll need a new one this year. So yes, in theory, that should drive demand for more folks than normal to upgrade. The problem, which I've also been pointing out for some time, is that much of that AI functionality isn't coming for months – some of it not until next year. And none of it is actually launching with these iPhones 16. As I wrote around Apple's earnings last quarter:
That reads like Cook downplaying a bit the notion of a "supercycle" for the forthcoming iPhone 16. Given that the new AI features will be limited to newer devices, there's a thought in the industry that more people than usual will upgrade to get access to those (much like the hope around the "AI PC" "supercycle"). But given that Apple Intelligence isn't even launching alongside the new devices and will come in a later update, Apple can't really overpromise here.
Cook just kept calling Apple Intelligence "another compelling reason" to upgrade but not "the compelling reason" to upgrade. The idea that people will buy a new iPhone just to get features that will ship over the next year seems like a stretch. They'll buy a new iPhone if they need a new iPhone, or are enticed by better cameras and the like, as usual. Some may upgrade to "future proof" their device for when Apple Intelligence ships, but will it be more than normally would upgrade already?
The iPhone 16 "supercycle" narrative actually only has legs if people are either future-proofing (as mentioned, some will, but this shouldn't be a mass event) or if the broader public is "tricked" into thinking Apple Intelligence is here.
On the latter point, it's certainly possible many people who don't live and breathe this stuff do think Apple's AI is here already – why wouldn't they? Apple announced it on stage at a big event this past summer. There were endless headlines about it. There are endless headlines about AI in general. The Android phones already have AI features, so why wouldn't the new iPhones? "Tricked" isn't really fair, but you get the point. Apple pre-announced a lot of features – far more than they normally would – undoubtedly to ease pressure on the company in our AI narrative era. So if the "supercycle" is even just a blip on the sales radar, it's probably related to that. And ultimately, if that's the case, it's probably not a big deal as Apple Intelligence is coming – it's just coming very slowly.
To that end, Gurman has a new update:
Apple made the decision to delay its new image-generation features to iOS 18.2 (rather than 18.1), which is scheduled for release in December. That includes the Image Playground app and the Genmoji capability, which uses AI to make emoji based on inputted text.
iOS 18.1 has been in testing with developers and does feature some Apple Intelligence functionality. But most of it is very rudimentary stuff. It's well done, but it's also table-stakes. Still, Apple is taking a smart approach in how they're bringing AI to market, I think. In that they're baking it into products you already know and use and focusing on features you will actually likely use. Versus things that just make for good demos, as many others have been doing.
That said, Image Playground and Genmoji were two AI features that were actually user-facing in a major way. And now those are looking more like a December release rather than an October one (when the first AI features will likely launch in iOS 18.1). Perhaps this is also okay as if Apple pushes these features out just ahead of the holidays, that could actually spur some sales.
But as Gurman concludes:
This spread-out approach means it’s unlikely for the AI platform to be compelling enough to drive serious upgrades this year. Instead, Apple will have to tout some of the changes to the phone itself. That includes a new photo-snapping button, and the addition of the Action button to lower-end models.
By fall of 2025, when it’s time for the next iPhone, Apple should be in a stronger position. Apple Intelligence will be fleshed out and available in more of the world. Moreover, the iPhone will have a real upgrade driver: a new look.
That’s all to say: Don’t believe the hype about an iPhone 16 super cycle. But you can start believing in one for the iPhone 17 next year.
The iPhones will also, apparently, be getting more RAM next year – at least the Pro variety. Historically, this hasn't mattered too much for the iPhone, but it likely will for the aiPhones. As I wrote a couple weeks back:
Apple, of course, is hoping that the forthcoming Apple Intelligence features will lead to a wave of people upgrading their iPhones this year. The reality is that none of those features will actually launch with these new iPhones and will instead come in waves of software updates, starting in October and continuing well into next year – notably, much of the new Siri functionality. So yeah that notion, plus this news, would point to a situation where it probably makes sense for a lot of people to actually wait to upgrade their iPhones until *next year*.
One more thing: It now sounds like Gurman doesn't believe an Apple Watch Ultra 3 will launch today alongside the other new Apple Watches. This makes sense given that the Apple Watch Ultra 2 was barely an upgrade over the first version and the rumored third version was going to be similar. That also will keep the focus on the slightly updated design of the Apple Watch Series 10 (ten-year anniversary edition?). But one thing we may now see today instead? Updated AirPods Max with USB-C. Finally.
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler