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The Two Words Apple Never Said During Its iPhone 16 Event
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The Two Words Apple Never Said During Its iPhone 16 Event

A version of this story appeared in CNN Business’ Nightcap newsletter. Sign up for free to get it delivered to your inbox. here.


New York
CNN

Apple is putting AI into its phones like a new U2 album that no one asked for.

Whether you’re an Apple fan who pre-ordered a $1,200 iPhone 16 Pro Max or an average person who’s been stuck in group chats with nothing but blue bubbles for years, at some point you’ll have artificial intelligence features built right into your phone.

It hardly matters that the real-world applications for most of its AI products so far have been both disappointing and unreliable. In the absence of other major innovations, Apple is betting that even emerging AI tools will inspire people to upgrade, ushering in a “super cycle” of sales for the coming year.

However, given the “Apple Intelligence” highlights the company first teased in June and officially rolled out Monday, investors and customers may want to temper their expectations. Even Apple seemed to hedge a bit: It never mentioned the words “artificial intelligence.”

The new tools look … nice. Cute, even. They’re exactly what we’ve come to expect from Apple: intuitive, friendly, and generally not creepy. With the iPhone 16, you’re getting a smarter, more human-sounding Siri. You can generate custom emoji by typing something like “heart eyes zombie eating pizza.” You can point your camera at a dog in the park and the phone can (roughly) tell you what breed it is.

But the AI ​​tools now being offered fall firmly into the “nice to have” category – not the “must-have” category that would drive someone to spend a thousand dollars on a new device.

“Despite the unknowns of feature timing and global rollout, I believe consumers will be excited about these AI features,” Gene Munster, a managing partner at Deepwater Asset Management, tweeted ahead of the phone’s formal unveiling at Apple headquarters. Munster expects iPhone sales to exceed Wall Street estimates in the coming quarters.

Of course, given the way iPhone cycles go, even a boring iPhone 16 should sell robustly, since many customers have held on to older phones and are ready for an upgrade anyway. That’s still a positive: Brand loyalty is one of Apple’s greatest strengths, which is partly why Apple is taking its time to integrate AI slowly and transparently (having learned its lesson from 2014’s U2 album debacle).

Despite all the AI ​​hype, it was barely talked about

For an event built around the unveiling of Apple’s first AI-powered iPhone, there was one glaring sentence missing from the two-hour presentation: the words “artificial intelligence.”

Instead, CEO Tim Cook and other company spokespeople referred only to their “intelligent” features.

To be clear, “Apple Intelligence” is Apple’s own AI. But Apple — the most brand-conscious company in the world — understands something that often gets lost in the bot-pilled bubble of Silicon Valley: Regular people don’t trust AI.

While developers in Silicon Valley and investors on Wall Street are laser-focused on a bot-powered future, the people who will actually buy these AI-powered devices still need some convincing. (And even Wall Street enthusiasts are growing impatient with the technology’s lack of ROI.)

Over the summer, a study published in the Journal of Hospitality Marketing & Management found that describing a product as “AI-powered” tends to lower a customer’s intention to purchase.

It’s not hard to see why: our interactions with chatbots and AI image generators have quickly taught us to be skeptical of their contrived, often downright incorrect renderings. When something doesn’t look authentic, we now say it looks like it was generated by a bot. When we hear a politician botch his campaign speech, we say it sounds like ChatGPT wrote it.

Ever-image-conscious Apple knows better than to fall into the “AI” trap, even though the whole story of the new iPhone revolves around AI.