Apple (AAPL) has struggled with smartphone saturation recently, resulting in significant slow growth in iPhone sales. The slowdown has everything to do with a lack of game-changing features that would give consumers a reason to upgrade their current models or buy a new iPhone. However, that is set to change in 2025.
AI iPhone Boost
JPMorgan’s Samik Chatterjee believes the integration of artificial intelligence features into iPhones will be a game changer likely to fuel the upgrade cycle. With Apple expected to launch the iPhone 17, product sales are expected to surge to record highs of 251 million units as consumers rush to access some of the advanced AI features designed to enhance smartphone user experience.
The integration of AI into the iPhone is expected to strengthen Apple’s services, which have emerged as a key revenue driver in recent years. Artificial intelligence is expected to bolster services like Apple Music News, TV, and payment through Apple Pay.
Apple Intelligence
For owners of certain iPhones, Macs, and iPads, Apple Intelligence, a software tool suite that brings what Apple refers to as artificial intelligence to its devices, will be made available as free software updates. A slightly enhanced version of Siri, Apple’s virtual assistant, and tools that automatically summarize text, transcribe audio recordings, and eliminate distractions like photo bombers from images are all part of the first iteration of Apple Intelligence.
This launch marks the start of a new era for Apple. Nearly two years after the ChatGPT chatbot from OpenAI revolutionized the tech industry, the Cupertino, California, behemoth underwent a significant reorganization to become Apple Intelligence. Apple executives were worried that the iPhone would eventually appear outdated without comparable artificial intelligence technology. As a result, they abandoned their more than ten-year-old self-driving car project and redirected their engineers to work on Apple Intelligence.
ByteDance Taps Nvidia Chips
In the meantime, TikTok’s Chinese parent company, ByteDance, intends to invest $7 billion in Nvidia’s (NVDA) most cutting-edge GPUs. However, ByteDance will not purchase the actual chips because the U.S. government prohibits the sale of sophisticated AI chips to China for national security reasons.
Instead, it will purchase access to the chips through cloud services provided by U.S. data centers. According to previous reports, the Commerce Department released proposed regulations earlier this year requiring cloud providers to inform the U.S. government of any foreign clients training large AI models that could be used for malicious cyber activity.
Run: AI Acquisition
Similarly, Nvidia has successfully acquired Run: AI for $700 million. It now has access to software that enables users to utilize and maximize GPUs in the cloud thanks to the acquisition. Although it had previously declared its intention to acquire the Israeli company in April, Nvidia added a surprise twist by declaring that it would make Run: AI’s software open source.
Making the software open source is part of an effort that seeks to allay regulatory worries. The leading manufacturer of AI GPUs is Nvidia. Maintaining open access to Run: AI’s software is a considerate act that was borrowed from Microsoft’s playbook. Microsoft consented to grant a ten-year license for Call of Duty to other platforms to secure approval for its $69 billion acquisition of Activision Blizzard.
