Apple’s doubling down on AI with the iPhone 16 hasn’t moved many shares

The new iPhone 16 range has an array of features, including an improved camera and new controls, but Apple made a point of highlighting that this would be the first iPhone series built ground-up to support their flagship AI: Apple Intelligence. Apple has been comparatively late to the AI party, with many of the features offered by Apple Intelligence being available elsewhere. The ability to generate emojis or images, along with AI neural language networks, are some interesting additions to the Apple formula, but they don’t seem to have had a huge impact on share price.

As reported by Yahoo Finance, shares in Apple were down by 0.9% in the run-up to Glowtime, and only rose by about 1% following it. This isn’t anything new, with a Goldman Sachs analyst being quoted as saying the presentation was "mostly in line with historic events”, but it doesn’t seem to be the major boost that the company wanted. With some recent lawsuits filed regarding Apple’s alleged battery tampering that have had adverse PR effects, did the iPhone 16 need to show off more?

Yahoo Finance speculates that part of the root cause for the delay is the gap between the iPhone’s release and the new Apple Intelligence features. Like shipping a camera without any firmware, it feels like there’s a disconnect between the features Apple has listed and the features that we’ll get at launch.

The share price today as pre orders opened worldwide reflected this, too: though the price did rise, it was only by a marginal 0.049%. This is still Apple we’re talking about, so those shares are still valuable, but it’s perhaps not the bumper payday that normally comes from an iPhone 16 launch.

However, as a chart by BOFA listed in the article highlights, Apple’s share price tends to increase months after the fact, rather than an instant spike:

Source: Yahoo Finance

Equally, however, the stock has redlined as much as boosted, so it will be interesting to see how the iPhone 16 launch affects things.

Pundits have weighed in on the overall reaction to Glowtime being somewhat underwhelming, and customer confidence in AI has been rattled of late. It’s only been a few months since Microsoft scrapped their own AI-powered Copilot+ system for privacy fears. It struck us how frequently Apple brought up the security of it’s AI features, but it doesn’t change the fact that in buying an iPhone 16, customers are entrusting Apple Intelligence with a huge array of personal data. Most of the AI features don’t look that practical, and require both a hefty investment and a hefty amount of trust.

Meanwhile, Needham analyst Laura Martin thinks that the hesitancy to pick up the iPhone 16 lies not in the features, but the lack thereof:

"You should wait for the [iPhone] 17 because it’s going to have … cooler stuff and there will be more gen. AI capability."

Source: Laura Martin, Yahoo Finance

So stuck between the rock and a hard place of too much change and few new features, Apple Intelligence is yet to truly find its feet. And with over a month until it even comes close to release, there’s not really any incentive to pre order the iPhone 16.