Thursday, July 25, 2024

Apple Intelligence solves one of Tim Cook’s biggest problems: finally giving customers a reason to upgrade their iPhones

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AI—no, not artificial intelligence; Apple Intelligence™—was the focal point of Apple’s keynote presentation for its annual Worldwide Developers Conference (WWDC) on Monday. The 100-minute program was jam-packed with announcements, but Apple Intelligence and the company’s long-awaited upgrades to Siri, which has been a laughingstock among virtual assistants for the better part of the past decade-plus, stole the show.

The catch? You’ll need the latest Apple devices to actually enjoy Apple Intelligence. And it’s exactly what Tim Cook and co. have needed to get people interested in new iPhones again.

Interest in the iPhone has been waning. Demand for Apple’s smartphones fell 10% globally in the first quarter of 2024, reaching a six-year low. But iPhone sales are absolutely critical to Apple’s bottom line, accounting for over 50% of the company’s revenue in recent years. Lately, the company has diversified its revenue streams, building out services like Apple TV+ and Apple Fitness+, but between 2015 and 2018, the iPhone was responsible for nearly 70% of Apple’s income. It’s been Apple’s single most important product since its debut nearly two decades ago.

Apple’s biggest problem with the iPhone hasn’t been quality—new models regularly get excellent ratings and reviews—but rather giving customers new reasons to upgrade every year. One could argue the last major update came with the iPhone 12 in late 2020, which was the first to support the ultra-fast 5G network. Since then, though, each phone has come with incremental upgrades and refinements. JPMorgan noted “iPhone spec upgrades are largely minor” after last September’s iPhone 15 unveiling, for instance.

Apple Intelligence’s exclusivity to the latest iPhones changes that. You can buy last year’s iPhone 15 models, which come with the A17 Pro chip that serves as the floor for supporting Apple Intelligence, or you can buy whatever Apple serves up later this year; the company typically announces new iPhones in September. So even if the hardware doesn’t change much from last year—and that’s likely to be the case, as a thinner redesign is expected for 2025—the software will be a compelling reason to upgrade.

In case you missed Monday’s keynote, or just want a quick primer on what Apple Intelligence can do, we’ve broken down the most notable capabilities and experiences here. To summarize briefly: It can edit and rewrite your notes and messages, create original images (including your emojis of your own design, called Genmojis), prioritize your notifications, and most importantly, understand context so when you make a request, it can look at all of your relevant personal data and take action on your behalf—while all still preserving your privacy, Apple insists.

While you’ll need an iPhone 15 or later to enjoy these new experiences in a smartphone package, you can also buy any Apple device powered by the M1, M2, M3, or M4 chips, which power Apple’s Mac computers and latest iPads. 

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