Apple’s iPhone 16 launch is a big test for consumer AI

Apple (AAPL) will hold its annual iPhone launch event on Monday, September 9, at its headquarters in Cupertino, California.

CEO Tim Cook is expected to headline the keynote address, which will reportedly include the launch of the iPhone 16 lineup, the 10th anniversary edition of the Apple Watch and updated AirPods.

That’s a lot of hardware, but Wall Street isn’t counting on new iPhones or special edition Apple Watches to move the company’s stock price. Instead, all eyes will be on Apple’s Intelligence platform, which is powered by generative artificial intelligence.

Apple Intelligence is the company’s big initiative to bring generative artificial intelligence capabilities to iPhones, iPads, and Macs. Wall Street hasn’t been too enthusiastic about how long it’s taken Apple to announce its AI initiative, waiting impatiently for Microsoft (MSFT) and Google (GOOG, GOOGL) to launch their own AI services for businesses and consumers.

But investors changed their minds when Apple introduced Apple Intelligence at its WWDC developer conference in June, sending the company’s stock price up about 15% and putting it ahead of Microsoft, Amazon, Tesla and Google in year-to-date performance.

Apple is making Apple Intelligence a key selling point for its latest phones, as its software will only run on last year’s iPhone 15 Pro or newer phones. And analysts are counting on that exclusivity to boost iPhone sales.

“Apple’s intelligence remains key to unlocking pent-up iPhone demand and accelerating the replacement cycle, and we expect Apple’s event to heavily highlight the integration of AI into the new iPhone 16,” Morgan Stanley analyst Erik Woodring wrote in a note to investors.

But Apple Intelligence could prove to be more than just a catalyst for iPhone sales. It could also shift the focus of generative AI in consumers’ eyes.

Apple’s AI Opportunity

You only need to look at Apple’s invitation to its September 9 trade show to see that the company is betting on AI. From the “It’s Glowtime” slogan to Apple’s multi-colored logo meant to evoke Siri’s new look, the company is sending the message that this trade show will be a showcase for AI.

Apple is integrating AI into its software products with features that summarize text message threads, surface priority emails in the Mail app, provide an improved Siri experience, and enable access to OpenAI’s ChatGPT.

Apple is also including basic AI tools, like writing tools that will help you improve your emails and documents by proofreading your text or reworking it to make it sound more professional or concise. The company also expects developers to jump on the AI ​​bandwagon, creating new apps that take advantage of the technology through Apple devices.

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