Apple is ramping up for a big iPhone 16 sales boost thanks to Apple Intelligence

AppleInsider

Apple is hoping for a great second half of 2024, with the company reportedly having expectations that iPhone 16 shipments will be about 10% higher than its 2023 figures.

A render of the iPhone 16

Apple's presentation of Apple Intelligence at WWDC may have invigorated sales of its smartphone, thanks to the potential of Apple Intelligence. With the prospect of an AI boost, Apple is now hoping that consumer sentiment will translate into more sales.

Supply chain members have been warned by Apple that it is hoping to achieve a 10% growth in shipments compared to the second half of 2023. The source familiar with the matter told Bloomberg that it would build on top of the 81 million iPhone 15 units that shipped in the second half of the year.

Sources also say that the reception of Apple Intelligence features has helped embolden this outlook.

A shared outlook

The report's claim echoes those of other observers seeing a confident smartphone producer at work.

On July 1, a report said Apple had increased its chip order from TSMC. The increase was sufficient enough to propose iPhone sales of between 90 million and 100 million units.

By contrast, the iPhone 15 and iPhone 15 Pro had an order volume from September 2023 in the region of 80 million to 90 million.

A July 8 note to investors from analysts offered that a massive upgrade cycle, a so-called "Supercycle," is expected for the iPhone 16. A lot of it is driven by the addition of Apple Intelligence and the potential for AI firms to offer more services to consumers.

It's not only consumer demand for Apple Intelligence features prompting a potential wave of upgrades. Analysts on June 28 told investors that China's smartphone market is recovering, and so were Apple's fortunes.

Observing May 2024 sales, Apple's revenue from the region was starting to increase, with a 44% increase in sales compared to April. On a year-on-year basis, May 2024 was up 40%.

A change in confidence

This sentiment is in stark contrast to claims from March, when Apple's troubles in China led to a cut in expected shipments.

In April, it was indicated that shipments in the first quarter of 2024 had dropped 9.6% year-on-year. At the same time, it was observed that Chinese vendors and chief rival Samsung were seeing growth.

Even going back to November 2023, there was speculation that China shipments were down more than expected. There was an anticipation of a continued downward trend in China throughout 2024.

Now, half a year later, it seems things have brightened up for Apple from that dour outlook.



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twolf2919

I doubt there will be a 10% increase in iPhone sales for the iPhone 16 introduction.  For one,  none of the AI features Apple is hyping will be available this year - judging by their complete absence in the 3rd developer beta of iOS 18, we're talking about 2025 here.  And then people have to be convinced that these features are actually worth buying a new phone for.  So I doubt Apple will see any benefits from the introduction of AI until iPhone 17 - September 2025.

And I think unless there's a truly remarkable improvement in Siri's capabilities, there won't be much of a  bump at all.   Don't know how many folks would splurge for a new iPhone for the privilege of being able to search ones email or photo library in more ways - or to rephrase one's email composition.

Give me a much better Siri and a higher-res optical zoom and I'll stand in line.

nubus

twolf2919 said:

I doubt there will be a 10% increase in iPhone sales for the iPhone 16 introduction.  For one,  none of the AI features Apple is hyping will be available this year

Some features will likely ship in 2024 and cover 1/3 of all revenue for Apple (US English). If the launch of AI was global would Apple then expect 30% growth? And what if those 2/3 that don't get AI decide to put the decision on hold? And iOS 18 supports all the same devices as iOS 17 making it easier to stay on the device. Seems 60% of iPhone 15 sales were Pro and that series is already capable of AI.

Perhaps 10% is not only AI. 

kiwimachead

Apple really jumped the gun on this announcement. Their AI features look great but are still probably a year away from being delivered and ironed out so can only guess they are masking embarrassment at how outdated the performance of Siri and predictive text, etc, are looking in 2024. My 256GB 14 Pro is only two years old and as poor as the basic functionality is for some stuff, it’s still a fast phone so will just wait for new features to be ironed out with the iPhone 17 or 18 pro.

Flappo

Really cannot see the attraction of ai , looks like another gimmick to me

canukstorm

nubus said:

twolf2919 said:

I doubt there will be a 10% increase in iPhone sales for the iPhone 16 introduction.  For one,  none of the AI features Apple is hyping will be available this year

Some features will likely ship in 2024 and cover 1/3 of all revenue for Apple (US English). If the launch of AI was global would Apple then expect 30% growth? And what if those 2/3 that don't get AI decide to put the decision on hold? And iOS 18 supports all the same devices as iOS 17 making it easier to stay on the device. Seems 60% of iPhone 15 sales were Pro and that series is already capable of AI.

Perhaps 10% is not only AI. 

If there wasn't such hype and mindshare around AI right now, I wouldn't be surprised if Apple wanted to announce Apple Intelligence features until WWDC 2025 instead.

debonbon

Flappo said:

Really cannot see the attraction of ai , looks like another gimmick to me

But you can make cartoon stickers that look horrible!

AniMill

I couldn’t care less about AI, I’m focused on the 5x lens and camera improvements. My little 12 Mini is getting old.

jdw

ChatGPT4o is stupid, quite literally.  I've been trying to use it almost daily over the last month.  Daily, it makes serious errors.  I deliberately ask it things I know the answers to.  It makes mistakes, I correct it, it apologizes, and that's it.  And here's the FUNDAMENTAL FLAW...  It told me it corrects itself (1) only for me, and (2) only for the single session I am speaking to it.  In other words, my corrections are 100% in vain!

That is a needle that pops the enormous bubble of HYPE surrounding AI!  Not only is AI stupid in making all these errors, but we aren't allowed to train it so it can learn and be better for EVERYONE!  That to me is crazy.

Sure, sure... There would need to be vetting in place so it won't learn lies and think such is truth.  But that is within the capabilities of AI, I would think, being able to check hundreds of sources online to confirm or deny what individual human users are trying to teach it.

So on some level, ChatGPT4o is as brain dead stupid as SIRI.  For example, I've trained SIRI countless times how to pronounce my daughter's name, but it still can't do it. And yes, I know about the Contacts trick that is supposed to work but doesn't.  In like manner, no matter how much time and effort you invest in correcting ChatGPT, the people behind it refuse to allow it to LEARN from users, which means it is only as useful as its developer makes it, which is ridiculous in my opinion.  I want a LEARNING "AI."  It doesn't need to be sentient, but it needs to learn what is correct and what is incorrect, and that can happen much faster if global users can aid in that process, rather than expecting its developer to do it.

The promise of AI is far too restrained, in my opinion.  Yes, there's some usefulness to it, but I'm constantly having to check the results to see if what is says is correct, which almost nullifies the time savings I hoped to get by using it.

jellybelly

Apple’s AI features will start to appear around the December to February timeframe.  From the WWDC sessions I attended, and looking at the hooks for third party apps, I can imagine Apple’s first party apps will be pleasant to use.   

Today’s hyped AI that a lot of you are complaining about is indeed annoying at times.  But that’s the LLM generative AI. Maybe we’re expecting too much.  All types of ML or AI are improving at an accelerating rate with improvements marked more in 6 months rather than yearly—certainly noticeably improved yearly. Disregard the hype, be patient and look forward to the coming improvements.

Apple’s three level approach is attractive in that generative AI like CHAT GPT is only one of the three levels, and only if local or private cloud AI doesn’t provide you what you want.   

1.)  The first level, on-device, will be able to learn and take your corrections with durability. 
2.)  The private cloud AI, the 2nd prong, will be encrypted and anonymized. Apple would likely curate that intelligence to weed out bad information.  

3.)  The third prong is your option, and you have to consciously delect the option of going to the third party AI.  It looks like Apple might take on more partners for third party AI LLM choices. 

Apple is rarely first mover and usually releases when they’ve refined something new.  Sure, you can give me a list of shortcomings—I’d bet my list is longer.  But on the whole, other than Siri, Apple’s use of machine learning has been pretty useful even if in subtle ways. 

My prediction from what I learned at WWDC, and from past experience with Apple striving to under-promise and over-deliver, is that AI and Siri will be a pleasant experience by January or February. In the keynote and on subsequent interviews, Apple revealed the new session nature of Siri queries. They demonstrated follow up queries related merely by session proximity eg.  Make ‘XYZ’ appointment.  Oh, and remind Joe of that in a text. 

They demonstrated stumbling and changing what you said in a command or query.   That shows real life usefulness. (especially for me)

When do the best deals happen on iPhones? In the March timeframe.   Consider the iPhone 16 upgrade for March and get a good deal — it will time well with the AI features.  

For many of us, upgrading in the Fall is fine—we’re patient and will be happy for improvements when they are delivered—when they are ready.