Apple Fans Flock to Stores for iPhone Despite Delayed AI Rollout
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(Bloomberg) -- Apple Inc. fans lined up at stores around the world for the new iPhone 16, shrugging off the fact that the device’s signature feature — a new suite of AI tools — won’t arrive until later.
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The company saw significant lines and waiting times at several major Apple retail stores globally, indicating a potentially strong start for the product. The company introduced the iPhone 16 lineup in almost 60 countries on Friday, including the US, China, India, Australia and South Korea.
Chief Executive Officer Tim Cook greeted crowds at the company’s location on Fifth Avenue in New York alongside Apple’s head of retail, Deirdre O’Brien. The store was outfitted with lights to mimic the new glowing interface of the Siri digital assistant. Other Apple outlets, including in Los Angeles, Australia and China, had notable lines of people picking up preordered phones or showing up without a reservation.
The device won’t come installed with Apple Intelligence — the much-anticipated AI software that the company has been touting since June. That means users will have to download the software features over time as they become available during the coming weeks and months.
That’s put Apple in a tricky spot. It’s already marketing the AI features heavily, but some consumers may be wary about buying the new phones if they can’t enjoy the benefits right away.
Given the strong initial buzz — even if it’s driven in part by Apple die-hards who line up every year — the marketing tactic may be working.
In terms of its look and feel, the new iPhone isn’t a major leap from prior models. A touch-sensitive Camera Control button, which makes it easier to take pictures and video, is the most notable change.
Even so, Wall Street remains bullish that Apple can accelerate growth during the all-important holiday season. Analysts estimate that revenue will increase 8% in the December quarter — the best showing for that period since the end of calendar 2021.
The new lineup includes two standard models — the 16 and 16 Plus — as well as the higher-end Pro and Pro Max. Preorders of the devices began last week, ahead of shipments to stores and customers getting underway Friday.
The initial units going on sale will run the iOS 18 operating system, but Apple Intelligence will require an over-the-air update to the iOS 18.1 software, which is launching in October. Apple has outfitted its retail stores with machines called “Presto” that will allow the company to load up Apple Intelligence and other iOS updates in the future. That will let Apple skip the usual scenario where iPhones are sold with outdated software.