by This is the main conclusion from today’s morning letter, which you can read to register to receive in your inbox every morning, along with:
Apple’s (AAPL) unveiling of the iPhone 16 on Monday shows the company is sticking to the basics when it comes to new product launches, rather than jumping straight into the AI race.
As Dan Howley noted, the company is firing its AI shot carefully, slowly, and deliberately. The aim is to ensure that its AI, which it calls Apple Intelligence, doesn’t make a bad first impression and poisons the AI.
But if you look at it another way, Monday’s presentation shows a company unwilling to rush into technology it hasn’t yet found the right application for. In the meantime, the company is doubling down on its marketing and user experience, making the banal seem appealing.
In addition to the slick but gradual AI features, the company launched hearing-aid-capable AirPods, an Apple Watch that can now detect sleep apnea, and a phone with a satellite network for emergencies, wrapping three long-standing tech devices into a package with its distinctive brand identity, intuitive user experience, and familiar products.
It appears the company is picking low-hanging fruit rather than trying to prematurely remove the still-ripening AI crop hanging from the branches.
Apple has been trying to figure out what to do next since 2016, when iPhone sales began to flatten as people started holding on to perfectly good old phones. Incremental improvements to camera and display quality weren’t noticeable — and certainly not requested. The annual refrain of “best battery ever” seemed to hold water when batteries were still holding up after two years.
Because the hardware was working too well to replace, Apple had to focus on other parts of its growing offering, particularly services.
Investors hope that artificial intelligence will solve Apple’s hardware sales problem, as they hope the technology will do for a host of other things. But many still see current and imminent incarnations of AI as a solution in search of a problem — cool functionality, perhaps, but with a currently vague use case for most businesses, let alone consumers.
The two popular letters got a lot of attention, but the shared billing of AI and the event’s slate of safety features make it clear that Apple is diversifying its portfolio, managing AI expectations, and keeping a firm focus on the company’s ecosystem and services. As Bank of America analyst Wamsi Mohan wrote , the new devices are “focused on attracting more users to the ecosystem,” and while the phones cost the same (a nod to tamed inflation?), the satellite phone feature will become another revenue stream once the two-year free trial expires.
Apple has long been the GOAT at transforming challenging technology into consumer-friendly packaging. Computers, MP3 players, tablets, phones, smartwatches, smart TVs, wireless headphones — it’s an all-time record.
AI could fall into this category too, and it does exist, but it’s largely a B2B conversation. But as Apple well knows, so too are a bunch of decades-old tech products that never quite made it to the consumer market.
I had to dig a hole the other day and found a pipe in the road. I’m looking forward to the iPhone 17 metal detector.
Ethan Wolff-Mann is a Senior Editor at Yahoo Finance who writes newsletters. Follow him on X @ewolffmann.
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