Apple’s AI-Powered iPhone 16 Sees Early Sales Boost as Company Looks to Reverse Decline

Apple’s latest iPhone 16, enhanced with Apple Intelligence AI features, may be the key to revitalizing its smartphone sales, which have faced a downward trend in recent years. CEO Tim Cook introduced Apple Intelligence as a game-changing technology that could “supercharge” the iPhone lineup, and the initial sales figures released this Thursday offer a first look at its impact.

For the quarter ending in September, Apple’s earnings report shows iPhone sales hitting $46.2 billion – up over 5.5% from last year’s figures and slightly exceeding analysts’ expectations. Notably, this period includes only two weeks of iPhone 16 sales, as preorders opened on September 13, and the device reached store shelves on September 20. Despite its brief time on the market, early data suggest the iPhone 16 could help Apple reverse a recent four-quarter streak of year-over-year revenue declines, driven in part by weak iPhone sales and economic uncertainty.

The iPhone 16 arrives at a critical time, as Apple has faced criticism for a lack of compelling upgrades in recent models. Some analysts suggest the AI-driven features could spark a long-awaited “supercycle” for iPhone upgrades. Unlike past models, the iPhone 16 introduces Apple Intelligence, a suite of AI tools integrated throughout iOS 18, allowing users new capabilities in note-taking, call transcriptions, and advanced summarization features. The rollout of these features began this week and is expected to continue into December with iOS 18.2, potentially driving further interest in the coming months.

During an earnings call, Cook highlighted the strong adoption of iOS 18.1, noting it has double the installation rate of iOS 17.1, indicating early excitement. He also affirmed that Apple Intelligence “sets a new standard for privacy in AI” and positions the company well for the competitive holiday quarter ahead.

Despite promising signs, sales in China – a key market for Apple – were underwhelming, remaining nearly flat at just over $15 billion, slightly below the $16.1 billion analysts projected. Apple reduced iPhone prices in China earlier this year to combat fierce competition from local brands, though Apple Intelligence features face region-specific deployment challenges.

Apple’s overall revenue grew by 6% year-over-year to $94.9 billion, slightly above projections, though profits declined by 35% compared to last year. Wall Street remains optimistic, with analysts pointing out that Apple’s holiday quarter performance will be the true test of iPhone 16’s success. Wedbush’s Dan Ives projects a strong quarter, noting there are “roughly 300 million iPhones globally that have not been upgraded in over four years.”

With an AI-equipped iPhone 16 and a gradual rollout of new features, Apple is positioned to potentially make a significant comeback, bolstered by robust demand for both hardware and services as it heads into the critical holiday season.