Apple bulls are hyping a potential iPhone supercycle, but operator execs are more cautious
AT&T has a massive installed iPhone base that rivals could try to poach
An analyst notes that Apple's new GenAI features have already been implemented by Google and other handset providers
Will Apple promote a winter of generative artificial intelligence (GenAI) adoption with its launch of the iPhone 16 next Monday? If so, operators are certainly being circumspect about the possibility.
The forthcoming iPhone 16 is widely viewed as a test of consumer appetite for AI gadgets, where offerings from others like Microsoft and Samsung have – so far – underwhelmed. As Fierce recently reported, some feel Apple's new device could trigger a handset upgrade “supercycle”.
Operator executives, however, commenting about the prospect of an AI-driven Apple upgrade boom, remain a little more prudent about the device and its ability to drive switching activity.
At the Bank of America conference this morning, AT&T CFO Pascal Desroches was asked about the possibility of Verizon trying to regain net add growth by targeting AT&T iPhone “switchers” from AT&T with the AI promise of iPhone 16.
“I’m really not [concerned]” Desroches said. “We’ve lived through iPhone launches before and we are prepared. We’re going to be competitive in the market but disciplined,” he added, ignoring the GenAI hype that Apple bulls have been spreading about the iPhone 16.
“Upgrading your phone is often the time that consumers can be enticed to switch carriers.” Avi Greengart, lead analyst at Techsponential, noted in an email to Fierce. “AT&T still has a LOT of legacy iPhone users, which makes it a rich target for rivals, but many AT&T subscribers are part of family or business plans, making them considerably less easy to poach.”
Meanwhile, Sowmyanarayan Sampath, EVP and CEO of Verizon’s Consumer Group, also largely ignored the Apple AI hype at the Citi conference. “All I can tell you is there a cycle,” he said. “I don’t know if it’s a supercycle or not, and the customer keeps the handset north of 40 months today.”
There are two reasons a customer upgrades a handset, he stated. One is “a new G”, which has come into play in 2021, 2022 and 2023. The other is “different hardware” that you can “see, touch and feel.”
“We don’t see a supercycle this [time] but we’ll have to see what the OEMs offer,” Sampath said.
Indeed, Greengart said Apple AI in the iPhone 16 will add features like image editing, image generation, and text summaries that Samsung and Google have already offered. But going forward he added " Apple may uniquely be able to have an AI-powered Siri do things for you across multiple apps and data stores all accessed securely and locally on your phone.”
We shall see on September 9 (the iPhone 16's release day) whether the Apple AI train is speeding down the tracks.