Apple iPhone 16 Hits Stores Without Long-Awaited AI Features

APPLE faces an unprecedented challenge: convincing customers to buy the latest iPhone models without their biggest new feature.

Apple is launching the iPhone 16 lineup in nearly 60 countries on Friday (September 20), including the U.S., China, India, Australia, and South Korea. However, the device will not feature Apple Intelligence, the much-anticipated AI software the company has been touting since June. That means users will have to download the software features over time as they become available in the coming weeks and months.

That puts Apple in a tough spot. It already heavily promotes AI features, but some consumers may hold off on buying new phones if they can’t enjoy the benefits right away. Meanwhile, the new iPhone hardware offers only modest improvements over previous models. The most noticeable change is a touch-sensitive Camera Control button that makes it easier to take photos and record video.

Still, Wall Street remains optimistic that Apple can accelerate growth during the all-important holiday season. Analysts are estimating revenue will rise 8% in the December quarter — the best performance for that period since the end of the 2021 calendar year.

The new lineup includes two standard models – the 16 and 16 Plus – as well as the higher-end Pro and Pro Max. Pre-orders for the devices began last week, with deliveries to stores and customers starting Friday.

It’s rare to see huge crowds of iPhone buyers in Apple stores these days, but some die-hard fans have lined up in various locations around the world. The big question will be whether regular consumers will also buy the new model.

The first units that go on sale will run iOS 18, but Apple Intelligence will require an over-the-air software update to iOS 18.1, which will be released in October.

Apple Intelligence was unveiled in June at the company’s Worldwide Developers Conference and has been available in limited beta testing for developers for several weeks.

Apple on Thursday released a public beta of Apple Intelligence — aimed at a wider audience — though most customers won’t have access to it until the feature suite is released in its final form next month. Additional capabilities won’t be ready until later, as part of a gradual rollout that will last into next year.

When the tech giant introduced the iPhone 16 line, it said the devices were the first to be built “from the ground up” for Apple Intelligence. However, some of last year’s iPhones — the 15 Pro and Pro Max — will also be able to support the features.

The new phones don’t look much different from the 2020 iPhone 12, but they stand out with noticeable improvements in battery life and camera improvements — in addition to the new button. Prices start at $799 for the standard iPhone and go up to $1,199 for the Pro Max.

In previous years, consumers who ordered phones from Apple’s online store experienced major shipping delays — a sign that supply wasn’t meeting demand. That hasn’t been as much of a problem this year, as orders are slower or Apple simply has more phones in stock.

New orders for standard iPhone 16 models will ship in early October, with the Pro versions arriving around the middle of the month.

Apple also unveiled lower-end AirPods this month and updated watches. The new earbuds — dubbed AirPods 4 — are available in $129 and $179 versions, with the latter model including noise cancellation. That feature was previously reserved for the more upscale AirPods Pro, which cost $249.

Meanwhile, Apple’s latest smartwatches don’t offer a major reason to upgrade. The new Series 10 has a larger display and a thinner design, but otherwise looks similar to the Series 9. The company’s only change to the more expensive Ultra model is a black color option. Still, the products could appeal to customers who have older Apple Watches or are new to the category.

iPhones, Watches, and AirPods won’t be the last new Apple products in 2024. The company is also planning a major Mac overhaul later in the year.

Apple will move its AI-focused M4 processor from the iPad to its MacBook Pro laptops and iMac desktops. It is also preparing the most significant overhaul of the Mac mini in the product’s 20-year history, with a smaller design and new chips. BLOOMBERG