Apple is forced to take a risky gamble in the field of artificial intelligence with the iPhone 16 Pro

Updated July 19 with details on reduced orders in the iPhone 16 supply chain.

With demand for Apple’s iPhones slowing, how will Tim Cook and his team be able to attract consumers to its ecosystem? Data from CIRP analysts Data shows that demand for iPhones — particularly the current iPhone 15 model — is lower than demand for the iPhone 14 this quarter. This mirrors the pattern of declining demand seen in Q1 2024.

Update: Friday, July 19: While there is talk of an AI boom when Apple launches its AI-powered iPhones, this has yet to trickle down to the supply chain. Two major component manufacturers in the supply chain do not expect growth due to increased demand.

Analyst Ming-Chi Kuo said: On earnings calls from TSMC and Largan, their outlook for next year is similar to last year.

“My understanding is that some suppliers have seen an increase in iPhone 16 orders for 2H24, but from an EMS/assembly perspective, iPhone 16 orders for 2H24 haven’t seen much change (around 87 million units), and are still slightly lower than iPhone 15 orders for 2H23 (around 91 million units).”

Since Apple is the biggest player in this market, any increase in demand to cover the upcoming iPhone 16 series would positively impact its outlook. As it stands now, the story is the same as it was in 2023; strong sales but nowhere near unlocking an untapped market thanks to AI.

The report also highlights one way Apple hopes to boost its sales. But it’s a risk that requires patience in a volatile smartphone market.

Apple will look to one key factor in the iPhone 15 lineup that is already accelerating Android sales. Generative AI has changed the way consumers view what a smartphone can do, from editing photos and videos, to summarizing and analyzing text and images, to aiding creativity.

After announcing Apple’s AI plans at its Worldwide Developers Conference in June, The company’s shares rose seven percent.Essentially, this is based on the promise of increased iPhone sales. Given the high demands that generative AI places on devices and Apple’s efforts to process as much user data as possible on the user’s device, Apple Intelligence will only work on one existing iPhone model – the iPhone 15 Pro Max.

Consumers who don’t own the most expensive iPhone on the market will need to buy the latest iPhones to access the A18 Pro chip, which is specifically designed to support generative AI routines.

But the AI ​​that the iPhone clearly lacks right now won’t be available until the first quarter of 2025. Tim Cook and his team will be asking Apple followers to buy the smartphone with the promise of receiving AI at some point in the future.

Meanwhile, all of these features have been available on Android since Google introduced the idea of ​​an AI-powered smartphone in October 2024 with the Pixel 8 launch. With Google’s Pixel 9 family announced in August, Apple’s iPhone will be two generations behind Android’s AI efforts before it leaves the Cupertino stage.

But will consumers be content to wait for Apple to catch up, or will they decide that the AI ​​revolution can’t wait? If so, Apple’s decision to “hold on” could help revitalize iPhone sales. But if so, Android may have just found Tim Cook’s Achilles’ heel.

Read more about Apple’s iPhone 16 and iPhone 16 Pro launch plans now…