Apple unveiled its AI feature, Apple Intelligence, at its product launch event on September 10, announcing a US rollout in October. However, support for languages such as Chinese, French, Japanese, and Spanish won't be available until 2025. With no major hardware or appearance changes, the impact of Apple Intelligence on market demand remains uncertain. Supply chain sources indicate that the situation will become clearer in October after the first wave of sales.
The iPhone 16 series aligns closely with pre-launch leaks, featuring a new second-generation 3nm chip, new materials, thinner bezels, additional side buttons, and Camera Control. These incremental upgrades have not generated significant surprise in the market.
Apple Intelligence is viewed as a potential key driver for consumer demand. However, it won't launch simultaneously with the iPhone 16 series, instead being introduced through a free software upgrade in October. Support for non-English languages will be delayed until 2025.
Supply chain sources believe that the release and emphasis on AI features in new Android smartphones has indeed impacted Apple, which currently lacks AI functionality as a major selling point. The announcement of Apple Intelligence was seen as Apple's strategy to disrupt the existing smartphone market.
However, the delayed availability of AI features has raised concerns among supply chain sources. They worry that consumers considering an upgrade to experience Apple Intelligence might postpone their purchases.
The Chinese market, which has previously played a significant role in supporting Apple's revenue, could pose particular challenges. With Chinese domestic smartphone brands continuing to launch new products, including foldable models and enhanced AI features, the iPhone 16 series without Apple Intelligence might struggle to regain Apple's previous market dominance in China.
Supply chain sources believe that while maintaining a loyal customer base of Apple fans likely won't be an issue, attracting regular users to boost overall market share will be more difficult. They suggest waiting until 2025, when Apple Intelligence supports the Chinese market, to properly gauge its impact.
Despite potential challenges in the Chinese market, Apple remains confident in the consumer demand Apple Intelligence can drive, particularly for its high-end Pro and Pro Max models.
Supply chain sources indicate that Apple has focused on supplying the high-end Pro and Pro Max models. More than 40% of the first wave of iPhone 16 shipments will reportedly be iPhone 16 Pro Max models. When combined with the iPhone 16 Pro, these models can account for 60-70% of the initial wave of shipments, reflecting Apple's strong confidence in the high-end market.
However, supply chain sources also caution that while the shipment progress is on schedule and the market launch is set for September 20, the lack of immediate availability of Apple Intelligence creates uncertainty about attracting users beyond the core Apple fanbase. The real impact will become clearer after the first wave of sales and market responses in October.
