Will AI features in Apple's iPhone 16 boost sales?

With slowing sales, Apple has been under pressure to reignite iPhone demand.

On Monday, the tech giant unveiled the iPhone 16, featuring an external camera button.

This button hints at the internal changes Apple has made, focusing on harnessing artificial intelligence (AI).

CEO Tim Cook said the upgrades would "push the boundaries of what a smartphone can do," though Apple faces tough competition, as other brands have already integrated generative AI features.

Apple’s share price dropped during its "Glowtime" event, where the iPhone 16 and other products were revealed, ending the day flat. The company, valued at $3 trillion, faces concerns that it's falling behind in AI innovation.

iPhone sales, which make up about half of Apple’s revenue, have slowed, dropping 1% in the nine months ending June 29 compared to the previous year.

Apple's new phones, with longer-lasting batteries, more powerful chips, and enhanced privacy, are designed specifically for AI and new "Apple Intelligence" tools, announced in June.

These include tools for writing, creating new emojis, and integrating ChatGPT into Siri for queries and text generation.

Apple also announced updates to its Apple Watch and AirPods. The AirPods can now reduce volume during in-person conversations and reject calls by shaking your head.

The Pro version of the AirPods can also act as a "clinical-grade" hearing aid for people with mild or moderate hearing loss, pending regulatory approval, expected this fall in over 100 countries.

Previously, Apple allowed users to pair hearing aids with iPhones and other devices.

The event also saw protests across the street, demanding Apple take more action to protect children from harmful content in its App Store, featuring a large blow-up resembling Mr. Cook.

Sales of the new iPhone 16 begin in September, starting at $799, though the Apple Intelligence features will not be available until October in the US, and in the UK by December.

Ben Wood, chief analyst at CCS Insight, noted that while some might see the new camera control as just a "glorified shutter button," the upgrades, including AI-powered visual search, were substantial and could win over customers.

He said, "The combination of Apple Intelligence and new camera features on the iPhone 16 will help spur upgrades from loyal Apple customers."

Apple has lagged behind competitors like Samsung and Google, who have integrated generative AI for photo editing, translation, and web browsing, and are developing folding and tri-folding smartphones.

Pre-orders for Huawei's new tri-fold Mate XT phone reportedly exceeded three million on Monday.

Gartner analyst Annette Zimmermann said Apple's later entry into AI-ready smartphones makes it "critical" they perform well, cautioning that early rollouts could harm the brand or lead to lost sales.