Innovation is limited, and the market is lukewarm about Apple's first AI phone

Apple Inc. released its first AI-enabled iPhone 16 series on September 9, but the market reaction was tepid. Some analysts believe that Apple is not outstanding in AI applications, lacks innovation highlights, and its replacement cycle has not yet arrived, which may make it difficult to effectively boost the company's future performance. Unlike the previous focus on camera, chip, and appearance specifications, the AI function of Apple's new phone is the focus of the market. Apple Intelligence (Apple's intelligence) will be applied to the new phone and will first be launched in the United States in October, followed by English-speaking countries (Australia, Canada, New Zealand, South Africa, UK) in December, and will be launched in China, France, Japan, Spain next year. According to a report by the Japanese Economic News, the generative AI phone will ignite the market, and it is predicted that the shipment of smartphones will return to an increasing trend after two years, of which 18% will be generative AI phones. Apple, which is late in the game, is trying to turn the situation around with its new phone. However, industry insiders believe that Apple's AI road is not optimistic. First, there may be a regional imbalance in the application range of Apple's intelligence. In the EU, due to regulatory influences, the activation of Apple's intelligence is expected to be delayed. In the world's largest smartphone market, China, the prospects of cooperation with local generative AI development companies are still unclear. Secondly, in terms of AI investment and cooperation, Apple's pace is slightly slower. The Wall Street Journal of the United States reported that the demand for AI-enhanced iPhones would be a test of how much interest the market has in the technology. Apple's competitors have invested heavily in developing models that can chat and interact with users in a similar human way, write content, and create images and animations. However, the profitability of many companies is still unclear, and investors have become more cautious about AI spending this year. Unlike its competitors, Apple has not invested heavily in AI, but hopes to participate in the market through cooperation with the most advanced AI companies and use external resources. Thirdly, the slowing replacement cycle also poses uncertainties for Apple's phone performance growth. According to Consumer Intelligence Research Partners (CIRP), carriers play a huge role in new phone purchases in the United States, accounting for about three-quarters of the total sales of new iPhones in the country. Although upgrade discounts still exist, some iPhone customers have delayed their replacements in recent years due to the lack of innovation or new features in the new generation of iPhones.