Rumor mill: Apple has remained on the sidelines so far as AI-driven features gain weight in the premium phone market, with other tech giants unveiling at least some form of GenAI services. While the Cupertino giant plans to cautiously embrace AI, it risks falling behind throughout 2024 with no major design changes on its upcoming phones, potentially leading to a decline in iPhone shipments.

Sources have told analyst Ming-Chi Kuo that Apple has lowered its 2024 iPhone shipment projections, predicting a notable decline compared to last year. The company might see the biggest drop of all the major phone players, at least partially due to a lack of AI functionality.

iPhone 15 shipments are expected to be down 10 percent in the first half of 2024 compared to the iPhone 14 during the same period last year. The upcoming iPhone 16 may see an even steeper decline of 15 percent in the latter half of the year compared to the iPhone 15 in the second half of 2023.

Conversely, Samsung has adjusted its shipment forecasts for the Galaxy S24 series upward by 5-10 percent for this year, betting on generative AI features as a key differentiator. The latest devices from Samsung and Google incorporate a variety of AI-based functions to improve searches, text generation, translation, and image manipulation.

However, Apple may not release an iPhone with comparable features until at least 2025. The iPhone 16 is slated to introduce minimal design changes compared to the recently leaked Google Pixel 9, but 2024 could mark the company's initial foray into generative AI.

Apple is adopting a cautious strategy with AI to sidestep the issues of hallucinations and ethics encountered by large language models used by Microsoft, Google, OpenAI, and others. Recent reports have suggested that Apple will unveil an upgraded version of Siri with iOS 18. Based on the company's proprietary LLM, it is expected to debut at WWDC in June before a public release in September.

The forthcoming iOS update could be among the most transformative in the iPhone's history, yet Siri might be the sole feature to benefit from AI enhancements. While Apple is exploring the use of an LLM for other applications like Pages, Keynote, and software development, substantial developments in these areas are unlikely to materialize until after 2024.