Apple enters new AI era with unveiling of iPhone 16

Apple’s ubiquitous iPhone is about to break new ground with a shift into artificial intelligence that will do everything from smartening up Siri to creating customized emojis on the fly.

“The next generation of iPhone has been designed for Apple Intelligence from the ground up. It marks the beginning of an exciting new era,” CEO Tim Cook said at a product launch at the tech giant’s headquarters in Cupertino, Calif.

Apple has sold billions of iPhones since late co-founder Steve Jobs unveiled the first such device in 2007, helping create about $3 trillion US in shareholder wealth.

But in the past decade, there have been mostly minor upgrades from one model to the next — which has caused people to hold off on buying a new iPhone and has in part led to a recent slump in sales of Apple’s marquee product.

The iPhone 16 is generating a bigger buzz because it is the first model to be tailored specifically for AI, a technology that is expected to trigger the biggest revolution in the industry since Jobs thrust Apple into the smartphone market 17 years ago.

The advances included in the iPhone 16 could set up Apple to be “the gatekeeper of the consumer AI revolution,” Wedbush Securities analyst Dan Ives wrote in a research note. Apple’s pivot began three months ago with a preview of its new approach during a developers conference, helping build anticipation for Monday’s showcase.

A test version of Apple Intelligence will be available in U.S. English next month. It will be available for other localized versions of English in December, and languages including Chinese, French, Japanese and Spanish next year.

The iPhone 16 will use the new A18 chip and have an aluminum back, as well as a new customizable button that can be used for camera controls. The iPhone 16 will start at $1,129 and the iPhone 16 Plus will start at $1,279.

Apple also unveiled iPhone 16 Pro and 16 Pro Max, titanium models with a faster chip, the A18 Pro, and more AI capability, such as offering suggestions on how to set up a photo shoot more effectively. The iPhone 16 Pro will start at $1,449 and the 16 Pro Max starts at $1,749.

New Apple Watch, AirPod features

Apple also unveiled new Watches and AirPods. The new Series 10 Watch starts at $549, is thinner than its predecessor and has an up to 30 per cent larger screen than previous generations.

Apple highlighted the Watch’s ability to help with sports and health issues, including finding longer-term conditions such as sleep apnea as well as detecting and responding to emergencies such as a fall.

Apple also launched a new version of the more rugged Watch Ultra 2, starting at $1,099.

The new AirPods 4 have a new design for more comfortable wearing and improved acoustics. And Apple rolled out hearing aid features that it has submitted for U.S. regulatory review.

Eye on Chinese market

Apple fans globally have been waiting to see the new phones with AI.

“The Chinese market is hungrier for AI features than the U.S. market,” said Ben Bajarin, CEO and principal analyst at Creative Strategies.

For Apple, “it will be very difficult to bring it to China immediately, so they’ll be going off the merits of the hardware.”

Apple unveiled Apple Intelligence at its developer conference in June. The product is the company’s take on generative AI that can conjure text, images and other content on command.

But the upgrades will take time to reach consumers. Apple Intelligence must be approved by Beijing in order to be released in the Chinese market.

In July, OpenAI blocked access to ChatGPT in China. That could impact its integration into Siri. Apple has not announced an AI partner for China, where iPhones accounted for more than half of Apple’s $383-billion US sales last year.

Apple on Monday unveiled its artificial intelligence-boosted iPhone 16, showing off the long-awaited phone, hours after Chinese rival Huawei’s tri-fold phone began racking up orders.

Apple aggressively slashed prices earlier this year in China, prompted by government restrictions and increased domestic competition.

The iPhone 16 lineup is the first Apple smartphones designed around these AI features, though they are expected also to be available on iPhone 15 Pro and Pro Max, the top-end versions of the previous-generation devices.

“The software side, and how Apple frames it, is the biggest question,” said Bajarin. “Investors will look for if it’s compelling enough to have a larger-than-normal upgrade cycle.”

Rivals including Alphabet’s Google are also showcasing AI features to try to upend Apple’s dominance in the high-end smartphone market.

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