Apple's AI Has a Catch — And It Could Help Boost Sales Not every iPhone owner will get to use the new Apple Intelligence.
By Sherin Shibu Edited by Melissa Malamut
Key Takeaways
- Apple's new AI features require that users have at least an iPhone 15 Pro or Pro Max.
- Apple's AI announcement yesterday could mean increased iPhone sales as more people decide to upgrade, according to analysts' predictions.
- An estimated 270 million iPhones have not been upgraded in the past four years.
Apple's new AI could boost sales of its biggest revenue generator: the iPhone.
Apple Intelligence, first announced on Monday at Apple's annual developer conference, noticeably enhances existing iPhone features. Siri, for example, can use information from different iPhone apps to answer questions more thoroughly and send questions that it can't answer directly to ChatGPT. There are also new AI-generated emojis coming to the iPhone.
But in the small print at the end of yesterday's AI announcement, Apple noted that though its AI software upgrade will be free, it will only be available on two iPhone models: the iPhone 15 Pro and 15 Pro Max.
Related: Apple Is Expanding What The iPhone Can Do
Analysts now say that AI could be the reason why Americans who are still holding on to older iPhones decide to upgrade.
Experts told Reuters that the new iPhones Apple is expected to announce later this year could be the company's biggest upgrade cycle yet since the iPhone 12 in 2020, which had 5G as a selling point.
"What we saw today was more compelling than anything we've seen since," analyst Gil Luria of D.A. Davidson told the publication.
The most popular iPhone in North America was the iPhone 11, according to a 2023 MOVR market report — so the many Phone owners in the U.S. who have older models will not be able to use Apple's AI when it becomes available this fall.
Wedbush Securities analyst Dan Ives told Reuters that an estimated 270 million iPhones had not been upgraded in the past four years.
Ives predicted that more than 15% of Apple's existing customer base will level up to the newest iPhone that Apple releases this fall.
Photo by Thilina Kaluthotage/NurPhoto via Getty Images
Apple's iPhone 14 was the bestselling smartphone globally last year, according to Counterpoint Research.
iPhones accounted for over half of Apple's overall revenue in the second quarter of 2024.
Apple has ventured into other markets recently, including mixed reality with the Apple Vision Pro headset.
Related: What's Next for Apple After Vision Pro? Home Robots
