iPhone Launch: Apple Faces Challenges Ahead
SAN FRANCISCO (Reuters) – As Apple prepares to unveil its latest iPhones this Tuesday, analysts suggest the company may struggle to make a splash. Competitors have surged ahead in integrating artificial intelligence into their offerings, which puts pressure on Apple to deliver something noteworthy.
This year, the potential standout could be the rumored “iPhone Air.” It’s expected to be thinner than previous models, drawing inspiration from the sleek design of the MacBook Air.
However, creating a slimmer phone means Apple will need to figure out how to fit batteries and cameras into a more compact design. Analysts believe the pricing strategy will also be vital; the phone should fall between the base iPhone 17 models and the pricier Pro versions to attract more buyers.
Dipanjan Chatterjee, a vice president at Forrester, hinted that a thinner iPhone might encourage upgrades. “It’s been some time since we’ve seen a significant change in the form factor of the device. The novelty of the Air could prompt many users of the 14, 15, and even 16 models to upgrade,” he noted.
Interestingly, the slimmer model might pave the way for a future foldable iPhone that resembles a book, possibly supporting an upgraded Siri. However, analysts believe we probably won’t see these innovations until next year.
Samsung is already on its seventh iteration of foldable phones, while Google is on its third. Yet, Chatterjee estimates that these models account for less than 2% of total phone sales and won’t likely rise beyond 5% anytime soon.
For Apple, a foldable phone could be crucial to regain market share in China, where consumers are drawn to such devices.
Historically, Apple has generated nearly a quarter of its sales from the mid-range iPhone category. Gene Munster of Deepwater Asset Management, which holds Apple shares, anticipates the company will find ways to increase prices across its iPhone range, perhaps by charging more for additional storage rather than referencing tariffs from President Donald Trump, which could raise eyebrows.
“They’ve learned to navigate relationships in Washington, so a direct price hike might not be well-received,” Munster commented. “Rising costs are a factor, and they’re aiming to maintain margins, which means they’ll need to be clever about it.”
AI Challenges for Apple
Initially, Apple had planned enhancements to Siri for last spring but postponed them due to engineering issues. Instead, they’ve collaborated with OpenAI, known for ChatGPT, to integrate some AI functionalities. In contrast, Google’s new flagship phones are designed to spotlight their Gemini AI models.
Reports indicate that Apple is in early discussions to utilize Google’s Gemini AI for revamping Siri.
Ben Bajarin, the CEO of Creative Strategies, suggested that Apple might emphasize enhanced AI capabilities of its next-generation Apple Silicon chips. This could lead to a more proactive Siri, capable of managing tasks in the background for the billions of Apple devices without depleting batteries.
“We might be seeing hints of a more comprehensive integration of agentic features with their operating system, given that the OS will likely be impacted the most by the AI processing capabilities of these chips,” Bajarin said.
Bob O’Donnell, president of TECHnalysis Research, noted that although AI integration is still in its early phases, Apple’s timeframe for catching up could boil down to months rather than years.
“They hold a significant share in the U.S., and customers are generally satisfied,” he stated. “However, by this time next year, if Siri is still underwhelming and if they don’t launch the foldable, I’m not so sure that satisfaction will last,” O’Donnell reflected.
