Apple forced to drastically downgrade iPhone 16 Pro

With the launch of the iPhone 16 and iPhone 16 Pro, Apple took the first steps towards a new generation of smartphones, but Tim Cook and his team will not be able to deliver the benefits to everyone who needs them.

Thanks to the influence of the European Union’s Digital Markets Act, Apple has made the drastic decision to remove its generative AI software suite—awkwardly called Apple Intelligence retroactively—from every iPhone in Europe. The company is refusing to make the software available to its European user base without clear guidance from regulators.

In Europe, iPhone sales have been stable for the past three years; 56.1 million units in 2021, 56 million in 2022, and 56.8 million in 2023. That’s between half and two-thirds of U.S. sales. Losing the European market to Apple Intelligence won’t have an immediate impact; the software will support a minimal set of languages ​​when it’s available, and the first update will be limited to U.S. English, with sections of the suite delayed until the first quarter of 2025.

Regardless, this decision puts Apple at a disadvantage today.

Solutions like Google’s Gemini AI and Samsung’s Galaxy AI could move forward by collecting mountains of anonymized user data to improve the product, as well as offering ongoing updates to existing software as they work toward a second-generation software release. Gemini AI was introduced with the August launch of the Pixel 9 family, while the Galaxy AI v2 is expected in January 2025.

Apple can’t do any of this, at least as far as its European user base is concerned.

Generative AI is one of the current driving forces behind smartphone purchasing decisions. A recent CNET study suggested that 34 percent of users have privacy concerns about AI. Apple has a strong brand identity that is partly built around its promise of privacy, and it leans heavily on it to try to differentiate its AI from its competitors.

Because of the dominant role that the iPhone and iOS play in the European market, the EU has designated Apple as a gatekeeper. In the EU, Apple must allow third-party companies to work with its services, essentially removing the gated garden around these core services and allowing competition and user choice on the platform.

Apple previously stated that “…due to regulatory uncertainties caused by the (EU Digital Markets Act), “we do not believe we will be able to make three of these features — iPhone Mirroring, SharePlay Screen Sharing improvements, and Apple Intelligence — available to our users in the EU this year.”

Would Apple Intelligence be subject to DMA access control requirements? If so, it would force Apple to open iOS to interoperability with other generative AI software solutions, giving users the choice of which AI software they want to use on their personal devices. Apple has been seeking clarity on how Apple Intelligence interacts with DMA, clarity that has not come.

Apple has chosen to sidestep the issue by refusing to allow its generative AI software to be installed on purchased iPhones, a drastic choice that will be seen as a downgrade by Apple’s dedicated community and will put European iPhones at a disadvantage compared to Android-based competitors.

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