Apple’s recent unveiling of its new iPhone line was expected to create a splash with its innovative “Apple Intelligence,” Apple’s branded take on artificial intelligence (AI). However, consumer reactions were more subdued than anticipated, casting doubt on whether AI really has the draw that Apple and other tech giants believe it to have.
Despite Apple’s efforts to promote AI as the device’s centerpiece, excitement was notably lacking among consumers and critics alike. Apple’s share price took a hit, dropping over a hundred billion dollars following the announcement. Even devoted tech fans, like the Wired Gadget Lab podcast team, found no compelling reason to upgrade to the iPhone 16 based on its AI capabilities alone. Surprisingly, what generated the most buzz wasn’t AI-related at all but a new camera shutter button on the side of the phone. This reaction begs the question: Has AI passed its moment of awe?
The End of AI’s “Wonderment Phase”
According to the tech blog The Media Copilot, AI has now surpassed its “wonderment phase.” Just a couple of years ago, generative AI tools like ChatGPT and DALL-E amazed the world with their capabilities to write coherent text and generate realistic images from simple prompts. Today, however, users are looking for productivity and practical applications in their AI experiences. AI models have evolved to become more powerful, but they are also becoming exponentially more expensive to develop and deploy.
While AI enthusiasts and tech companies continue to highlight its transformative potential, the industry’s economic realities paint a less optimistic picture. Google, Nvidia, Microsoft, and OpenAI recently met at the White House to discuss AI infrastructure, demonstrating a solid commitment to the technology. However, financial experts suggest the industry could be more profitable in this area. Forbes reports that there’s a $500 billion gap between AI investments and expected revenue, with the projected $100 billion in AI revenue for 2024 falling well short. Despite this, tech companies like Apple are pushing AI capabilities in their products to keep up with competitors like Google, Samsung, and Microsoft and to convince consumers that these new features justify an upgrade.
The Hype Cycle and Consumer Fatigue
This isn’t the first time the tech industry has tried to drive consumer excitement with futuristic technologies. Before AI, virtual reality and the Metaverse were touted as the following big things, especially after the launch of Apple’s Vision Pro headset in 2023. But when the Metaverse failed to gain traction, tech companies shifted their focus to AI, hoping it would fill the gap in consumer demand. Whether this strategy will succeed remains to be determined.
The AI features being rolled out in new smartphones focus mainly on tools like photo editing and writing assistance. While these functionalities are helpful, more than they may be needed to convince the average consumer to upgrade. AI has proven to be immensely beneficial in industry applications, ranging from online advertising to healthcare and energy optimization. For professionals, generative AI tools have become indispensable. A recent survey revealed that 97% of software developers have used AI to support their work, and other creatives like journalists, artists, and filmmakers have also embraced these tools for efficiency.
However, consumers need to be more enthusiastic about paying for AI-driven features on their devices. AI’s occasional inaccuracies in applications like AI-supported search have undermined its appeal. Moreover, many AI functions Apple offers, such as custom emojis, call transcription, and photo editing, are already available through popular third-party apps.
Apple’s Current AI Features: Useful but Unremarkable
Apple’s AI-based offerings for the iPhone include functions like custom emoji creation, call transcription, and even a feature to write emails. There’s also a Reduce mode, which claims to minimize disturbances by letting through only essential notifications. While these features are convenient, they hardly feel groundbreaking or revolutionary.
The one feature that shows some forward-thinking potential is Apple’s “Visual Intelligence.” With this feature, users can point the camera at an object, and the phone will provide relevant information without the need for a search. For example, if a user aims their camera at a restaurant sign, they can see the menu, read reviews, and even book a table. While this is similar to Google Lens, it offers a glimpse of how real-time, interactive AI could be incorporated into our everyday lives. It aligns with the concept of “context-aware computing,” which has been in development since the 1990s but has not yet become widely adopted.
The Waiting Game: Is Apple Intelligence Ready?
A significant limitation of Apple’s new AI features is that they have yet to be available for users to try. For now, these capabilities remain theoretical, as the latest iPhones do not include them out of the box. This is a surprising move from a company known for releasing products only when they are fully polished, with crystal-clear use cases and exceptional user experiences. This strategy is what made the iPod and iPhone so successful compared to earlier MP3 players and smartphones.
Without the chance for consumers to experience Apple Intelligence firsthand, it isn’t easy to gauge how valuable these features will ultimately be. Apple’s lack of readiness has already impacted its stock, and if its AI offerings fail to impress, the company may continue to see declines. The real question is whether Apple’s approach to AI can recapture its previous magic and satisfy the industry’s—and consumers’—high expectations.
Is it Time for a Shift in AI Strategy?
AI still holds incredible potential, but the industry might benefit from a more focused approach. Instead of pushing AI as a feature to drive device sales, companies like Apple may need to consider where AI can genuinely enhance user experience in meaningful ways. By identifying and refining AI’s most valuable applications, tech giants can provide innovations that resonate with consumers and fulfill the vast potential that AI promises.
Ultimately, Apple’s latest announcement suggests that AI might not be the smartphone game-changer it’s been made out to be. While there’s still room for AI to evolve into something extraordinary, its success will depend on tech companies’ ability to demonstrate real value beyond novelty.
