3 days ago
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Apple (NASDAQ: AAPL) recently unveiled its new iPhone 16. The launch of the latest iPhone is often a much-anticipated event for Apple fans, who are eager to see what the changes will be to the newest device. But the company hasn't always delivered much on that front, sometimes relying on modest incremental improvements, such as enhancing its cameras and offering new colors.
While investors saw this latest launch as an opportunity to help sell consumers on new artificial intelligence (AI) features, it appears as though the company's newest iPhone may be underwhelming, yet again. Here's why it wasn't all that impressive, and what it could mean for the stock.
There may not be enough of a reason to upgrade
The latest iPhone will have improved battery life, a better camera, and a new button that will make it easier to access the camera. Arguably, the most important enhancement is an upgraded A18 chip, which will enable users to access Apple Intelligence. However, users who have the iPhone 15 Pro will also be able to access the new AI features in Apple Intelligence.
And because some AI capabilities will run through the cloud and not just on the phone, it's possible other phones may be able to utilize AI features as well. Unfortunately, not all AI features will be available immediately as the rollout of Apple Intelligence will likely span until next year.
Ultimately, with AI capabilities being the main reason for upgrading the phone, it may be a tough sell for the company to get consumers to upgrade their iPhones. Creating images and using a digital assistant to help with day-to-day tasks and writing, for example, are features people can readily access via ChatGPT and other chatbots; users don't need to upgrade their phones for those types of features. Apple missed an opportunity to unveil a game-changing AI feature that could have created a significant need for its users to upgrade their iPhones. And that could be a sign that it may not have one.
This could lead to some underwhelming quarterly results
There was a hope among investors and analysts that this unveiling could have led to a big upgrade "supercycle." But aside from the most avid Apple fans or those who are concerned about privacy related to AI, there may not be enough of a reason for many users to justify upgrading their devices. Users craving AI features may simply opt to use a chatbot like ChatGPT that they can access via the web.
A lack of significant upgrades to the iPhone shouldn't come as a huge surprise to consumers or investors at this point. Modest cosmetic changes have been the norm for Apple in recent years. However, with the economy not in terribly great shape right now, this latest iPhone may not do the company any favors at a time when it needs a growth catalyst.
