Apple is anticipated to unveil the iPhone 16 on Monday. While the new model may feature only minor external updates, Apple is betting that significant internal changes will entice customers who have been holding off on upgrades for years.
The company plans to showcase its first iPhone lineup designed specifically for generative artificial intelligence (AI), which enables users to create text and images, during its annual hardware event, starting at 1 p.m. ET.
The event has been teased with the enigmatic slogan “it’s glow time,” and Apple has yet to reveal its meaning.
Apple faces significant pressure to demonstrate that the new AI features and other updates in the iPhone 16 justify an upgrade. The company also needs to reassure investors that it is not falling behind in the AI race, as competitors have already integrated similar technologies.
Since the launch of the iPhone 12 with 5G connectivity in 2020, Apple has given customers few compelling reasons to upgrade. Advances in phone cameras and screen resolutions have plateaued, making incremental upgrades less noticeable to users. As a result, iPhone sales, which account for half of Apple’s revenue, have been sluggish.
Apple’s stock had been relatively stagnant until the announcement of its AI features, suggesting that investors are pinning their hopes on AI to drive iPhone sales. The stock has risen 14% since the June 10 event and nearly 18% since the start of the year.
If Apple succeeds, it stands to gain significantly, as roughly 300 million iPhones worldwide have not been upgraded in over four years, according to Dan Ives of Wedbush.
While Apple may highlight updates to other products like AirPods and Apple TV+, the primary focus will be on the iPhone upgrade cycle, according to D.A. Davidson analyst Gil Luria.
Here’s what to expect from the Apple event:
The AI iPhone
Apple has hinted at several new features enabled by its AI technology, including more natural interactions with Siri, email drafting assistance, enhanced photo search, and personalized responses. The goal on Monday will be to demonstrate these features in action.
Expect to see demonstrations of AI’s capabilities, such as summarizing text chains and providing context on conversations. “These are the kinds of things that will get people excited,” Luria said. “The new processor chip will be crucial to handle the increased data processing needs of these AI features without sacrificing battery life.”
There may also be subtle design updates to the iPhone 16, like a wider screen or updated edges, to signal an upgrade. A dedicated camera button is also anticipated, according to Bloomberg’s Mark Gurman.
Pricing
A key question is how Apple will price the iPhone 16 lineup. The starting price for new iPhones has been $799 for the past four years. Analysts like Angelo Zino of CFRA Research suggest Apple might modestly increase prices due to the new AI features and associated costs. However, any price hike is expected to be moderate to avoid deterring customers with high costs.
Other Devices
Apple may also announce updates to the Apple Watch and AirPods. The Apple Watch Series 10 is expected to be thinner with a larger screen, and new low-end and mid-tier AirPods could be introduced. These updates will follow new software features announced at Apple’s June developers conference, including the ability to answer or decline calls with a nod or shake of the head for AirPods, and new health tracking features for the Apple Watch, such as detecting potential illness based on body temperature and heart rate.
