Can Apple’s iPhones pass the AI test?

San Francisco: Shortly before Steve Jobs’ death in 2011, Apple filled a cramped auditorium in Cupertino, California, for the unveiling of its fifth iPhone. The device’s biggest selling point was a new software feature called Siri, which helped cause a jump in iPhone sales.

On Monday, Apple is planning to run that play again.

For the first time in more than a decade, the tech giant will unveil a suite of iPhones whose signature feature won’t be an improved camera or an updated design, but new software capabilities. The system, called Apple Intelligence, will sort messages, offer writing suggestions and create a more capable Siri powered by generative artificial intelligence.

The new iPhones represent a big moment for generative AI, which can answer questions, create images and write software code. As a latecomer to the AI party, Apple is in a position to take the technology mainstream — or sow fresh doubt about its viability if it doesn’t live up to expectations.

Early enthusiasm for AI has been tempered by questions about its utility. This spring, Microsoft postponed features in an AI computer because of security vulnerabilities around the technology’s recording of every second of activity. Humane, a startup that raised $240 million for a device called the Ai Pin, was panned by tech reviewers because its system was slow to fulfill requests and sometimes fielded them inaccurately.

In the wake of those problems, Wall Street is looking to Apple for reassurance that customers want AI. The tech giant spent two years watching as Microsoft, Meta, Google and Samsung added AI to products. Apple has shown over the years that it can enter a market late and redefine it, as it did with digital music players, smartphones and smartwatches.

Apple is hoping that AI can rejuvenate the iPhone. It considers the opportunity in AI so important that it canceled one of its big bets — a $10 billion project to develop a self-driving car — and reassigned hundreds of engineers to work on the technology.

People are holding on to their iPhones longer as compelling new features have dwindled. The time between replacing an iPhone has expanded to nearly five years, up from three years in 2018, according to TD Securities, an investment bank. The slowdown in buying new phones has weighed on Apple’s business, which relies on the iPhone for more than half of total sales.

In addition to Apple Intelligence, which will be available on the iPhone Pro and Pro Max, analysts say, the new iPhones will feature a new button for taking photos, a slightly larger screen and faster processors.

Wall Street analysts predict the features could help Apple sell a record 240 million iPhones next year, a 12 per cent increase from this year.

Similarly optimistic forecasts tied to AI have backfired for other technology companies. In recent months, shares of Nvidia, Microsoft and Google have been dragged down by weaker-than-expected sales of AI products. The declines weighed on the rest of the stock market because artificial intelligence has become a major focus of investors.

For Apple, which introduced its first iPhone 17 years ago, it’s unclear whether new features even matter. Nearly three-quarters of users say they buy a new iPhone because their current phone has become obsolete or been lost or damaged, according to a survey by Consumer Intelligence Research Partners, a technology research firm. Only a fifth say they buy a new phone to get the latest features.

“Pushing out really cool new features used to drive a huge amount of replacements, but that isn’t doing it any more,” said Josh Lowitz, a partner at Consumer Intelligence Research Partners. “It’s become like replacing your clothes dryer or your running shoes. You replace them when they’re worn out.”

Apple has tried to distinguish its AI offering by emphasizing its ability to handle personal requests more privately. When it unveiled the technology in June, it said most requests would be fielded on the iPhone itself, where there’s a lower risk that personal information could be compromised. Other requests would be routed to a cloud computing network with Apple semiconductors that the company said wouldn’t store any information.

If a user asks Siri when her mother’s flight is arriving, Apple says, its AI system can provide a real-time estimate by pulling the flight information from an email and checking it against current flight tracking data.

The company will complement those AI services with answers from ChatGPT. It struck a deal with OpenAI, the maker of ChatGPT, to fulfill impersonal user requests, like what to cook with select ingredients.

(The New York Times sued OpenAI and Microsoft in December for copyright infringement of news content related to AI systems.)

Apple hasn’t said when its array of AI features will be available for the new iPhones. It also hasn’t explained how it will launch the technology overseas, particularly in China, its second-most important market. It is expected to address both Monday.

Because AI systems could process personal information, governments have been pushing to have their citizens’ data stored inside their borders. China previously mandated that with its citizens’ iCloud data, requiring that Apple cede legal ownership over the data to a state-owned company. It is not known whether it would do the same with an Apple cloud network for AI.

“This is a real challenge,” said Ben Bajarin, CEO of Creative Strategies, a tech research firm. “You’re going to need to be culturally or regionally customized because every country is going to have to be handled very differently. There’s a lot of uncharted territory here.”