(Bloomberg) -- Apple Inc. introduced the latest version of its flagship device, the iPhone 16, betting it can entice consumers with modest hardware upgrades and AI technology that’s still on the horizon.
Chief Executive Officer Tim Cook unveiled the smartphone — alongside new watches and AirPods earbuds — at an event Monday that was infused with the promise of artificial intelligence. The iPhone 16 was built for AI “from the ground up,” he said, though the capabilities will only be gradually added to the device via software updates.
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It’s a gambit for the tech titan, which has been racing to develop a suite of tools called Apple Intelligence. Though Apple has been touting the technology since its developers conference in June, the software won’t be included in the initial versions of the new iPhones. They’re set to go on sale Friday, with the product reaching stores on Sept. 20.
“This is just the beginning,” Apple software chief Craig Federighi said during the presentation. The first set of tools will be released as part of a beta test in October, he said, “with more features rolling out in the months to come.”
As part of the event, Apple unveiled a version of its smartwatch with a bigger screen and the ability to detect sleep apnea. And it touted new software that can turn AirPods into hearing aids.
The iPhone debut was the centerpiece of the presentation, though the company only made relatively minor changes to the device’s look and hardware features. The iPhone 16 and 16 Plus will be available in new colors and get a customizable Action button that had only been available on higher-end models. There’s also a more powerful chip and new Camera Control button that lets users snap pictures and access camera functions.
New Pro models, meanwhile, will get slightly larger displays and thinner borders. They will run an A18 Pro processor with an upgraded neural engine — the part of the chip designed to handle AI tasks. The phones have more powerful camera components and video features, letting them capture higher-resolution photos and more cinematic slow-motion clips.
Apple is playing catch-up in the world of generative artificial intelligence, where tech peers like Alphabet Inc.’s Google and Microsoft Corp. have made strides. Monday’s presentation was partly a pitch to consumers — and Wall Street — that Apple should be taken seriously in AI.
But the Cupertino, California-based company’s AI technology is still in early stages. The Apple Intelligence tools have faced numerous delays, and many key features won’t arrive until next year. For now, the technology is focused on summarizing messages and notifications, rather than matching the gee-whiz capabilities of rival systems.
Apple shares slipped more than 1.5% during the event, though they rebounded later. That kind of ho-hum reaction is fairly typical during Apple presentations. Most new features are reported ahead of time, and there were few surprises during Monday’s presentation.
AI was a major theme of the event, which kicked off at 10 a.m. local time. The company hopes to use the Apple Intelligence software to entice consumers to buy upgraded devices, since customers will need a recent iPhone to handle the capabilities.
Apple Intelligence will include an upgraded Siri digital assistant and the ability to create custom emoji with text prompts. The event’s “It’s Glowtime” theme was a reference to the look of Siri’s new interface.
But much of the technology won’t be ready right away, potentially limiting its impact on iPhone sales. Even when Apple Intelligence debuts in October, it will be a beta test — an early version for more adventurous consumers.
That “indicates a lot of the features are still being fine-tuned for release and not ready for prime time,” eMarketer analyst Gadjo Sevilla said in a note. “The focus on security and privacy is a likely reason for feature delays.”
The entry-level iPhone will continue to start at $799, with the Plus model selling for $899. The iPhone 16 Pro is $999, while the larger Pro Max version is $1,199.
Apple Watch
The new Apple Watch — the Series 10 edition — has 30% more screen area, even with a thinner design. The sleep apnea feature will be available in more than 150 regions, the company said.
The new watch is about 10% thinner than the Series 9 version. It also comes in a new titanium chassis that’s lighter than aluminum models. The device starts at $399 and will be released Sept. 20. A new version of the higher-end Ultra version also was announced, and it goes on sale that day for $799.
The event included an updated version of the standard $129 AirPods, which shrinks the size of the case and adds a USB-C charger. A $179 version also will be available — a midrange product — with noise cancellation. That used to only be available on the higher-end AirPods Pro.
The company introduced a new line of $549 AirPods Max headphones in fresh colors, also with USB-C charging. Like the other products, the devices will be released on Sept. 20. Apple didn’t debut a new version of its AirPods Pro, but introduced features such as a hearing test and the ability to act as a hearing aid. Those capabilities will be offered as a software update this fall.
Event Timing
The iPhone debut is usually Apple’s most important announcement of the year. The device accounts for roughly half of the company’s annual revenue, and it helps fuel additional sales in the form of accessories and services.
Apple doesn’t typically hold its iPhone launch on a Monday, but the earlier timing let the company get out ahead of an eventful Tuesday: A US presidential debate is scheduled for that day, and there should a resolution in a European Commission case over whether Apple has to pay $14 billion in taxes.