Underwhelming performance of Apple Intelligence will hit iPhone sales, Kuo claims
Analyst Ming-Chi Kuo called the performance of Apple Intelligence "underwhelming," adding that it won't entice people to replace their older iPhones.
The delays Apple Intelligence has faced might impact iPhone sales negatively.
In a social media post on Thursday, Kuo reiterated his previous claims that Apple Intelligence would "contribute less than expected to shipment volumes." In October 2024, the analyst said more or less the same thing -- that Apple's AI features would not facilitate a short-term boost in iPhone sales.
According to Kuo, the market has recently adopted a more cautious view of Apple Intelligence, presumably because of the debacle Apple faced with its planned Siri upgrades. We can already see signs of this, as Morgan Stanley decreased their expectations for Apple's stock prices, citing concerns regarding the current status of Siri and its postponed Apple Intelligence overhaul.
The iPhone maker was forced to delay some of Siri's heavily promoted Apple Intelligence features, such as the virtual assistant's personal context functionality and in-app actions.
Since last year's WWDC, I've consistently held a cautious view of how much Apple Intelligence would boost iPhone shipments. Take a recent case (see link below), just two months ago, I argued that the market was too bullish on 2025 iPhone shipments and reiterated that Apple https://t.co/pntSCTS4f7
-- (Ming-Chi Kuo) (@mingchikuo)
Kuo claims that Apple "had already factored in" the "underwhelming performance" of Apple Intelligence when the company shared conservative iPhone sales forecasts with suppliers in early 2025. Apple was presumably aware of the negative impact its Siri delay would have on sales figures.
While Apple Intelligence itself was originally announced in June of 2024, at WWDC, the company's generative AI features only made a partial debut with the release of iOS 18.1 in October 2024. Apple ran multiple advertisements depicting a new and improved, contextually aware Siri, but these features still have yet to reach end users, undoubtedly causing frustration and negative sentiment.
In January 2025, Apple CEO Tim Cook chimed in on the matter. He said that the iPhone 16 had performed better in regions and markets where Apple Intelligence was available, indicating that the company's generative AI features were a significant factor for users looking to upgrade.
This was before Siri's personal context features and App Intents features were postponed, however, making it unlikely that Apple Intelligence will influence iPhone sales in a similarly positive manner going forward. Siri's personal context capabilities are set to arrive "in the coming year," meaning that they might only become available with iOS 19.
Apple is said to be working on a massive user interface redesign as part of iOS 19, possibly in an attempt to drive attention away from the slow rollout of Apple Intelligence features. Similarly, a significant design overhaul is planned for the iPhone 17 range, which is set to feature an entirely new "iPhone 17 Air" model with an ultra-thin chassis.
Ultimately, any poor performance and negative public perception of Apple Intelligence if it materializes in the larger market will likely have a more significant impact on the existing iPhone 16 range, as Apple appears to be working on additional selling points for the iPhone 17. The company might opt to relegate artificial intelligence to the backdrop, putting the spotlight on major design changes and new camera-related features.
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That said, regardless of your “feelings” about Apple Intelligence one way or another, I can assure that nearly EVERY person with access to the writing tools should make more use of at least that aspect of AI.
For me, the Genmoji/Image Generator will be the part I use the least, but see that’s the great thing about Apple Intelligence — you can use what proves useful to you, and ignore what isn’t useful to you. Gosh, it’s almost like they designed it to work like that.
At least in early 2025 consumer-facing artificial intelligence (in general, not just Apple's offering) is still essentially alpha software. Even Apple labels Apple Intelligence with a "Beta" badge but it's barely that (look at the news headlines summary debacle).
Clearly you don't need Apple Intelligence for AI assisted writing tools, the third party AI offerings are perfectly capable of that.
It's worth noting that Mac sales aren't really affected by Apple Intelligence either; the macOS implementation trails the iOS implementation.
Here are the things that consumers prioritize in smartphones: cameras, display, battery life, and price. It's not rocket science. Not peak download speeds on mmWave 5G networks. Not how many polygons it can paint on the screen, not how many TFlops of calculations, not Geekbench scores.
I still believe that AI has great potential in the enterprise market and I know it has been used by some very large corporations over several years now. But a context-aware AI chatbot assistant is still years away based on my experiences with 7-8 chatbots. Those tools have way too many mistakes to make them trustworthy so the user ends up spending a lot more time double or triple checking their output. These chatbots aren't trustworthy. They will make up falsehoods and pass them off as fact without any sense of remorse or hesitation.
One piss poor tendency that AI designers have programmed into models is the inability for an AI assistant to understand when a question is beyond its capabilities. Trust is earned and a lot of LLM-powered AI chatbot assistants squander some of that trust every time they hallucinate or shovel out some B.S. as an answer.
Sure, the engineers say "we can fix that" but what they can't fix is the loss of trust. Some of them are belatedly understanding this and now adding more and more boilerplate to answers saying "okay, we might be wrong so please double check the answer." That's right, consumers are being asked to do debugging for piss poor LLMs. But for some of us, it's already too late. That trust ship sailed months ago.
I think a handful of Apple executives are realizing this. Half-assed AI will ultimately be more damaging than a delayed version of something actually useful and trustworthy.
My guess is within five years, 75% of these AI companies will have disappeared from the landscape. Some of the technology will likely be absorbed by some of the giants for internal use on proprietary tasks. But a large number of these consumer-facing AI services will be laughable memories.
And in five years a lot of AI engineers will be changing careers because they won't get hired by another company. AI will be writing most of the code. The people who get AI right won't want to hire the people who got it wrong. This is a critical time for Apple. They have to figure out if the right person is driving the stagecoach right now. They can't afford to keep passing the reins over to someone else or it'll end up like Project Titan (Apple Car).
Did you see their promotion? Apple promoted Apple Intelligence for selling iPhone 16 series!
I understand that Apple´s AI approach is challenging and different from regular LLMs as Apple focuses on local based LLM feature (That´s why Apple´s approach is harder and more challenging than any cloud-based LLMs).
But given the size in terms of their market cap., it is still embarassing and ridiculous that they are so slow and they are dummy to release something what they have promised for 16 series.
My bet is that Apple will never roll out a personalized Siri with such clunky codes.
Apple has shown strange moves recently: Normally, Apple is late, but does better. Apple launches when they are ready.
But it is surprising to see that Apple hits the market with half-baked features and new products like Vision Pro (Yes.. For me, it is a half-baked item which is forgotten as of today).
Something is rotten in the states of Cupertino.
Maybe, they need to check if their headcounts are not enough or not capable to do their jobs? (John...Do you feel addressed??)
The engineers should have been allowed to come up with at the very least a decent beta before this was announced.
They need to purge the incompetence in the management team starting at the top until someone competent is found. Apple is not too big to fail. Lack of trust in the customer base will tank sales of their expensive equipment.
Many, if not most customers, are getting sick and tired of false marketing and Alpha level software being touted as ready for prime time.
Fortunately, the Apple car died before hitting the road. One does not want to visualize the carnage it could have caused.
He seems to be a tech Nostradamus. Everyone thinks Nostradamus was right about so many things, but of the 900 or so predictions he made, only about 90 of them came true and that was with massive amounts of twisting information to make it fit.
I can't actually remember the last time Kuo was accurate on something related to Apple and yet tech publications keep reporting on him as though he's some sort of oracle.
Stop it. Do your own research instead of blindly listening to someone who I'm pretty sure is trying to game Apple's stocks.
Just lower your expectations to ZERO and you will not be disappointed.
The new stuff that was actually operational came out on the next generation device. The peanut gallery was left in the dark until launch day. Thus there was no disappointment that the latest frabitz was not working as designed.
Geez. There are actually some real life and death issues in the news daily now to worry about.......
I always have to turn off Bluetooth every time I update iOS because Apple always turns it back even if it was off before the update.
Hell, even my Mac mini sometimes turns Bluetooth on after I reboot which is annoying as well.