Apple Inc's (NASDAQ:AAPL) iPhone 16 debut had promised to kickstart a new artificial intelligence-fuelled era for the technology giant but was rather met with relative indifference by investors.
Shares were barely changed following the latest smartphone launch on Monday evening, with analysts also appearing largely underwhelmed by the event ahead of the phone’s pre-release on Friday.
Alongside the US$799 (£610) iPhone 16, new Plus and Pro models were introduced, as well as the latest AirPods and Apple Watch.
Apple intelligence
As flagged in its summer development conference, the iPhone 16 will be fitted with the latest A18 chip, using ARM Holdings PLC technology, in order to power AI-fuelled features such as an updated version of voice assistant Siri, image generating and ChatGPT-enabled writing tools.
Although these updates were already rolled out in a beta offering to US-based iPhone 15 users earlier this year, they will not be immediately introduced to the new model, but will hit the new iPhones from later this year and into 2025.
Swissquote Bank analyst Ipek Ozkardeskaya warned Apple’s AI capabilities were already viewed as “weak” in comparison to rivals, such as Samsung and Google which have already introduced phones incorporating the technology.
“Many think [these] can’t trigger a massive surge in new product sales,” Ozkardeskaya said, “even less so as these features will be gradually updated and won’t even be available at the products’ launch date”.
New design
On the design side, the new range of iPhone’s will have larger displays and a new camera control button, as anticipated.
Hargreaves Lansdown’s Matt Britzman appeared unenthused over the fresh design, arguing the new iPhone was “really another example of Apple lacking any real innovation on the hardware side of things”.
“Aside from the usual upgrades to performance and cameras, there are not a whole lot of new toys on offer,” he said.
“But that probably doesn’t matter. This next upgrade cycle is all about software.”
Apple said updates later this year would see the camera system’s shutter upgraded, alongside introducing a tool for users to scan objects for real-time information.
The company added developers were already working on apps to work with the new camera control, with Wedbush analysts previously pointing to third-party offerings as key for Apple's sales success.
iOS 18
Apple’s latest iOS 18 software is set to roll out with the new iPhone, bringing the AI features to the handsets.
Given stagnant iPhone sales over the first nine months of this year, Britzman dubbed this as “the moment” for Apple to appeal to customers on the verge of upgrading.
“Apple doesn’t need to reinvent the wheel on the hardware side if it can capture hearts and minds with Apple Intelligence,” he said.
How well the new iPhone is received will come to light on Friday, therefore, when pre-orders begin ahead of the full rollout on September 20.
Investors looked underwhelmed come pre-market trading on Tuesday, as Apple shares slipped 1.2%.