Apple’s shipments and ecosystem will suffer until iPhone 17 brings a significant design update and more comprehensive generative AI features in 2025.
That’s the gist of the latest analyst report from Ming-chi Kuo. He has high-quality sources in Apple’s supply chain, giving him an edge over other analysts.
Kuo’s survey of the supply chain doesn’t look promising for Apple’s near-term fortunes. Apparently, the company has cut its 2024 iPhone shipments down fifteen percent to 200 million units. “Apple may have the most significant decline among the major global mobile phone brands in 2024,” he wrote in a new post on Medium.
Meanwhile, Samsung has revised up its 2024 shipment forecast for the Galaxy S24 series by five to ten percent, with Kuo attributing higher-than-expected demand for the S24 “due to the high integration of generative AI functions.”
The new phone design paradigm
Kuo says Apple’s prized product faces “structural challenges that will lead to a significant decline in shipments in 2024, including the emergence of a new paradigm in high-end mobile phone design and the continued decline in shipments in the Chinese market.” The new paradigm includes generative AI and foldable designs.
Apple’s patents show the company has been developing a foldable iPhone for years, but such a product has yet to materialize. As for China, Huawei made a strong comeback, and Kuo warns about “the increasing preference among high-end Chinese users for foldable devices as their first choice for phone replacement.”
Due to the reasons stated above, the analyst estimates that Apple’s annualized iPhone shipments in the Chinese market have declined by 30–40 percent in recent weeks. “This downward trend is expected to continue,” he said.
He estimates that Apple won’t have an iPhone with significant design changes (how else will people know that I’ve upgraded?) and the more comprehensive generative AI features “until 2025 at the earliest.”
2020-2024 iPhone designs
Apple last revised the iPhone’s exterior design significantly with the iPhone 12 (2020). Compared with its predecessor, the iPhone 12 series re-introduced a glass sandwich design with flat edges. But Apple has reused more or less that same design across the iPhone 13 (2021), iPhone 14 (2022) and iPhone 15 (2023) models.
A few design varieties between them regarding color options, materials (aluminum, stainless steel and titanium) and features such as Dynamic Island doesn’t change the fact that the iPhone’s industrial design hasn’t changed much in four years.
And now Kuo is saying that this situation probably won’t change in a major way with the upcoming iPhone 16 (2024). Of course, executives at the Cupertino company are aware of this. Why else would they suddenly decreased their shipment targets?
Kuo predicts that shipments of the iPhone 15 models in the first half of 2024 will be lower by ten percent versus iPhone 14 shipments in the first half of 2023.
Also, projected shipments of the upcoming iPhone 16 models will be lower in the second half of 2024 than those for the iPhone 15 series in the year-ago period.
So it looks like Apple’s most important product has already begun falling behind competitors, especially with Samsung jumping on the generative AI bandwagon.
Rumored generative AI features in iOS 18
iOS 18 will come this fall with some generative AI features. Apple’s executives reportedly consider it the biggest iPhone update in the company’s history.
According to Bloomberg’s Mark Gurman, Generative AI should help Siri understand complex commands and assist with writing in apps like Pages and Keynotes. However, that’s all we know about Apple’s generative AI plans for now.
Generative AI on Samsung Galaxy S24
Contrast Apple’s approach with rival Samsung, whose new Galaxy S24 series has some pretty interesting AI-powered innovations. One of those lets you circle an onscreen object to instantly invoke a relevant Google search.
With Galaxy AI, ChatGPT-like text summarization is just a few clicks away in apps like email clients, reading and writing apps, etc.
Samsung’s Messages app can convert whole chat threads into other languages. Generative AI also powers a Google Magic Wand-like feature where you can move, resize and erase objects in photos as if they were in separate layers. And how about translating a phone call on both ends in real-time? Can your iPhone do that?
On the other hand, Samsung may start charging for those features. “Galaxy AI features by Samsung will be provided for free until the end of 2025 on supported Samsung Galaxy devices,” reads the fine print at the bottom of the Galaxy S24 page.