This trend is also reflected in secondary market data: Shipments of used smartphones are projected to grow by nearly 10 percent in 2023, reaching 309.4 million shipments, up from 282.6 million units last year, according to research firm IDC. For many people, a good phone really is good enough.
Apple is also selling privacy as part of its generative AI package, saying that Apple intelligence is “integrated into the core of your iPhone, iPad, and Mac through on-device processing.” Apple’s AI tools use large language models developed by Apple rather than relying on another entity’s models or a patchwork of LLMs, because it’s a tool that works with Apple’s AI tools as well as others … Confirmed by AxiosThe company says that in cases where the iPhone is not able to process a user’s activities or queries, Apple Intelligence will send the user’s data to a server running on Apple silicon, which will keep that user’s personal data secure.
This raises the question: If Apple is already planning to move some of the processing to its cloud, couldn’t slightly older iPhones — such as the iPhone 14 Pro, which is powered by a slightly older chip — also get an AI glow-up?
Michael Gartenberg, a consumer technology analyst at Flash Advisory & Research who previously worked at Apple, says he can’t technically say at this point if Apple is “being deceptive about which devices can run it. But I know iPhones can already run ChatGPT and a lot of Google’s AI features, so I think this is the opportunity Apple was waiting for to tell you that the iPhone 13 is really not good enough anymore,” he says.
The introduction of Apple Intelligence raises another question regarding iPhone sales: does it give consumers a reason to? No Gartenberg says that no one is ready to buy an iPhone before this upcoming fall, which puts the current iPhone buying cycle on hold. (And assuming buyers want generative AI features; Pew Survey Results (This suggests that Americans are more worried than excited about generative A.I.)
And, since Apple Intelligence will initially be available only in U.S. English, it’s unlikely to lead to an immediate boost in iPhone sales elsewhere — such as in China, one of Apple’s most important markets — unless Apple does something significant “future-protecting,” says Carolina Milanesi, founder of research firm Heart of Tech.
She says, “It depends on what kind of experiences they offer in other countries,” such as if the AI-generated ZenMoji is offered as a feature before text editing or other language-based features. Milanesi anticipates that “the big update cycle will be next year, when more languages will be added.” And in China in particular, Apple not only has to develop language support, but also determine how it will handle data storage, she says.
Either way Apple now has a new way to compel iPhone buyers to upgrade in September. This time it’s not just selling them a new camera by cramming it into a single container; it will undoubtedly do its best to convince customers that any new iPhone is a smarter smartphone, offering a taste of generative AI that’s still far more palatable than an AI chat platform in search of apps.
