Google will unveil the Pixel 9 phones on Tuesday, which will surely pack various Gemini AI features. That’s what we’d’ expect from Google, even without all the leaks that have already spoiled some of these surprises. However, the industry might be more interested in the success of the iPhone 16 and the Apple Intelligence suite of apps and features that will be available on all four Apple phones.
Insider Ming-Chi Kuo says that AI has been a strong driver for phones that turned genAI features into a key sales point, like the Galaxy S24 series, but that momentum is slowing down. It’ll be up to the iPhone 16 to convince buyers that Apple Intelligence is exciting enough to buy a new handset. Thus, the iPhone 16’s performance will be an indicator of excitement related to AI devices.
Kuo’s new report on Medium says the Galaxy S24 sales exceeded expectations, with stronger-than-expected demand in the initial months. The Galaxy AI suite of features is seen as the main driving force for the Galaxy S24 series. However, the Galaxy S24’s momentum has slowed since April.
Samsung introduced the Galaxy Z Fold 6 and Flip 6 in mid-July, which pack additional Galaxy AI features on top of the initial suite of AI apps unveiled in January. But preorders in July 2024 were 10% lower than the previous year.
Kuo says that Samsung will ship 8-9 million foldable phones this year, slightly lower than last year. The insider said the Galaxy S25 series should see similar sales to the S24.
It’s not just Samsung that’s been selling fewer foldables than before. Kuo says that Chinese brands are also seeing lower-than-expected shipments. This suggests that “growth in this segment may be limited in the near term unless the user experience improves significantly.”
I’ll note that Google will unveil its Pixel 9 Pro Fold foldable on Tuesday, with AI on top. As for Samsung foldable sales, I’ll remind you that Samsung has increased the Fold 6 and Flip 6 prices. That might explain the slower preorder action.
Back to Kuo’s remarks, he says “no clear evidence that Google and Samsung’s ongoing improvements to on-device AI services will trigger another wave of device replacement demand.”
Even so, Kuo observes that “some market participants remain optimistic about a dramatic increase in smartphone and PC shipments driven by on-device AI.”
This is where the iPhone 16 and the Apple Intelligence suite come in. Apple Intelligence is currently available only on the iPhone 15 Pro and 15 Pro Max via iOS 18.1 beta. Apple will retire the two phones when the iPhone 16 arrives. Come September, you’ll need an iPhone 16 variant to get Apple Intelligence. I know that’s a big reason I’m ugprading to an iPhone 16 this fall, but not the only one.
Kuo says that market optimism about AI hinges on the success of the iPhone 16 and its built-in AI capabilities. “If the iPhone 16 series doesn’t exceed expectations due to Apple Intelligence after its release in 2H24, this optimism could be corrected, leading to possible downside risks for related stocks in the short term,” he concluded.
