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Investor enthusiasm lags for Apple’s AI-powered iPhone 16 series

AI-Powered Features to Arrive in October via Software Update, as Investors React to the Launch

Apple has officially unveiled its much-anticipated iPhone 16 series, alongside new Apple Watches and AirPods, during its latest product event. While “Apple Intelligence” features took center stage, the full artificial intelligence (AI) capabilities, including a more advanced Siri powered by AI, won’t be available until October through a software update.

The iPhone 16 lineup includes the iPhone 16, iPhone 16 Plus, iPhone 16 Pro, and iPhone 16 Pro Max. These models, built with “Apple Intelligence” in mind, introduce a customizable action button and a dedicated camera control button for instant access. Powered by the A18 chip, the iPhone 16 series is designed to handle next-gen AI functionalities, such as generative AI processing.

For the iPhone 16 Pro and Pro Max, Apple has integrated the more powerful A18 Pro chip, which offers a 17% boost in total system memory bandwidth compared to the standard A18. The Pro models also boast larger displays and thinner bezels, housed within a sleek titanium frame that is lighter and more scratch-resistant than the previous stainless-steel versions.

The iPhone 16 and iPhone 16 Plus will retail at $799 and $899, respectively, while the iPhone 16 Pro starts at $999, and the top-tier iPhone 16 Pro Max is priced at $1,999. Pre-orders begin this Friday, with devices hitting stores on 20 September.

Apple Intelligence” was initially introduced at the WWDC24 in May, spotlighting the AI-powered Siri, which can now understand context, interact with apps more deeply, and respond to typed prompts. These upgrades, integrated with OpenAI’s ChatGPT, are accompanied by a new visual indicator—a pulsating light on the iPhone screen. However, these advanced AI features will roll out gradually, with the initial wave set to be tested in October and further enhancements following in the months to come.

Despite the high expectations surrounding the AI features, investors were underwhelmed, given that many of the new functions were previewed at WWDC. As a result, Apple shares dropped 1.5% during the event but recovered by the end of Monday’s trading. While the iPhone 16 series is expected to contribute to Apple’s sales in the fourth quarter, analysts have raised concerns about whether the delayed AI features will drive significant growth.

In addition to the iPhone 16 series, Apple introduced the new Apple Watch Series 10, which includes enhanced health tracking capabilities like sleep apnea detection. The Apple Watch Ultra 2, targeted at athletes, offers more accurate GPS tracking, while the AirPods Pro 2 include new health-related features, such as a clinical-grade hearing aid function. Apple stated that these features are awaiting FDA approval. The AirPods 4 and AirPods Max will also feature USB-C charging compatibility, offering more convenience for users.

As Apple prepares for its September quarter earnings report, due in late October or early November, the company hopes that the launch of the iPhone 16, along with its delayed AI features, will secure strong year-end sales and continued growth into the next fiscal year.

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