Apples Game Plan to Get Users to Buy New Phones

Apple Intelligence came out this month, and with it, there is a big generational push to add AI to the company's feature offering. This wonderful new shift to AI will finally upgrade Apple’s Siri and allow for a tiny AI assistant to hang out with you inside the device. The catch? If you own an iPhone 15 or older, you are out of luck.

Upgrade Or Move Aside

Apple says this is because older models don’t have a powerful enough processor to handle the AI platform, and yes, this is likely the truth as it requires tons of computing power to handle generative AI; however, this is likely by design to get users to shell out cash for the newer models. 

So if you want to experience the power of Apple Intelligence, you will need the newer iPhone 15 Pro or 15 Pro Max to take advantage of the software. This is a big bummer for those who bought an iPhone 15 this year, expecting it to stay updated with the latest software for more than at least a year. 

With the hype surrounding Apple Intelligence, early adopters and Apple enthusiasts will surely spend the big bucks to obtain a newer model. This will create a very favorable situation for Apple, which has had a plethora of problems over the past year, including its falling out with China, a big portion of its user base. 

The company is approaching market saturation, and rather than pushing to new markets (which are now far and few between), they are decidedly focusing on their current users and making sure they upgrade to new models. Their thinking is that potential customers using competitor products will see Apple Intelligence and that their friends won’t stop raving about it and will switch phone companies. That is great in theory, we will have to see how fast it will take competitors like Samsung and Google to create their own LLM or partner with a company like OpenAI.

Apple’s Big Problem

Apple makes durable phones. That is a massive problem for the tech company. Users are sent software updates quarterly that take care of operating system upgrades. Unless the phone battery deteriorates or the screen cracks, users do not have a compelling reason to upgrade their phones. The operating software is top-of-the-line, so what's the point of paying hundreds of dollars for a slightly improved camera? 

According to a recent study, 61% of iPhone users have had their previous iPhone for two years or more. Another 29% have held on to their phone for three years or more. Many only decide to upgrade if it is through a promotion being held by their data provider. Apple was losing out on millions of sales, and that is now all set to change for the foreseeable future. Users finally have the incentive they need to ditch their older phone models. 

Cashing in on the AI Hype

So, Apple is the big winner when it comes to generative AI for mobile devices. They are ensuring anyone who wants Apple Intelligence and doesn’t have the top-of-the-line model will need to pay up for it or risk being left in the dust. Exclusivity often breeds economic gains. My friend has Apple Intelligence, and I need it, too. 

Moreover, Apple is taking a holistic approach by introducing the software across many existing apps rather than containing it in one singular app. They have also finally upgraded Siri, a long-awaited upgrade many iPhone superfans have waited for. This will allow Apple to truly compete with Google Search. 

Now, the company just has to sit back and wait to see how well Apple Intelligence preforms during its early beta testing period. Then, they will truly understand how many users actually want to buy their next smartphone based on its software when it lands later this fall. Partnering with the industry leader, OpenAI, certainly won't hurt its chances.