Apple’s much-touted Apple Intelligence, designed to heighten the iPhone user experience, appears to be faltering where it matters – iPhone sales.
Ming-Chi Kuo, an analyst known for astute insights within the tech realm, has noted that Apple Intelligence isn’t significantly bolstering iPhone sales, particularly in the US.
Despite its rollout in the country, US iPhone shipments only nudged up slightly, from 31.7% in Q4’23 to 31.8% in Q4’24, according to Apple’s recent earnings.
Meanwhile, Japan, which is yet to see Apple Intelligence, registered a pronounced jump to 7.2% from 6.5% over the same interval.
This stagnant growth reflects broader consumer disinterest. Third-party surveys corroborate that Apple Intelligence isn’t wowing users; this likely feeds into the broader sales trend observed by Kuo.
“The earlier third-party surveys showing low user interest in Apple Intelligence align with my conclusion,” noted Kuo in his industry analysis.
In terms of revenue, Apple has been able to cushion itself from a stark shipment drop by banking on its premium offerings.
Despite a nearly 6% drop in shipment year-on-year in Q4’24, revenue saw only a marginal 0.8% dip.
The rise in the Pro models’ share, growing from 54% to 61%, underscores that customers are still leaning toward high-end purchases with substantial storage options. However, this mix improvement seems to be nearing saturation, confronting Apple with a strategic inflection point.
This evolution could possibly portend revenue uncertainties. “Without strategic adjustments, iPhone revenue could face a mid-single-digit YoY decline by 2026,” warned Kuo.
Dzambhala had previously reported on Kuo predicting sluggish iPhone sales for 2025, as the company’s bet on Apple Intelligence driving up demand failed to yield dividends.
Apple Intelligence comes in a single package and demands massive space on the user’s device, even if the user only finds one or two features agreeable to them.
The product is also facing widespread criticism from iPhone users on social media, with clear preference for offerings from the likes of OpenAI and Grok when it comes to AI chatbots and experiences.