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Yahoo
08-05-2025
- Business
- Yahoo
Wall Street thought AI would spark a massive iPhone upgrade cycle. Turns out, fear of Trump's tariffs did the trick.
Tariff fears spurred a surge in iPhone purchases in early 2025. Long-term iPhone users upgraded due to potential price hikes, not new AI innovations. This shows, again, how the iPhone is becoming a utility for most consumers. In a surprising twist, it wasn't flashy AI features that finally nudged longtime iPhone users to upgrade — it was tariffs. Wall Street analysts have been predicting a major iPhone upgrade cycle since Apple started integrating generative AI into the devices about a year ago. It hasn't really happened yet. However, fears of impending price hikes due to tariffs drove a notable surge in iPhone purchases in the first quarter of 2025, according to data from Consumer Intelligence Research Partners. This wasn't a marginal blip. The percentage of US iPhone buyers retiring phones three years or older hit 39% in this recent period. That's up from a steady 30% in previous quarters. "That is a significant shift," CIRP founders Michael Levin and Josh Lowitz wrote in a note to clients on Wednesday. "The threat of tariff-induced price increases really moved the needle." Maybe Tim Cook should thank Donald Trump? This shift marks a significant behavioral change among iPhone users, particularly those known for holding onto their devices the longest. Since the end of two-year carrier subsidies, and thanks to more durable hardware and better battery life, consumers have been upgrading less frequently. But the looming specter of higher prices changed the calculus for many iPhone owners. Long-term users, typically more cost-conscious than tech-hungry early adopters, decided it was better to buy now than risk paying more later. Interestingly, the tariff scare didn't inspire a blanket rush to upgrade across all user types. Those who already upgrade frequently, often after just one or two years, didn't significantly alter their patterns, according to CIRP's findings. Instead, it was the "delayers" — users who cling to aging devices — that made the leap. For them, this iPhone upgrade was less about chasing AI innovation and more about necessity: replacing a failing phone before the price tag climbed out of reach. The data confirms what I told BI readers about earlier this year: an iPhone is a utility now for most people. We don't care about the whiz-bang new features, we just need it not to break for as long as possible so we can run our increasingly digital lives. Long-term iPhone owners don't upgrade for status or the latest camera specs; they upgrade when holding off any longer becomes riskier than making a purchase. This cohort, often overlooked in flashy product launches, just made a major impact on Apple's quarterly sales. What remains to be seen is whether this bump is a one-time blip or the start of a new pattern. If macroeconomic concerns continue to shape tech-buying habits, Apple and its competitors may need to rethink how they target and serve this "long-hold" user base. For now, though, it seems a little tariff fear went a long way in moving a notoriously cautious segment of the market. Will future pricing fears continue to drive these pragmatic upgraders into the Apple Store sooner than expected? Time, and tariffs, will tell. Read the original article on Business Insider
Business Insider
08-05-2025
- Business
- Business Insider
Wall Street thought AI would spark a massive iPhone upgrade cycle. Turns out, fear of Trump's tariffs did the trick.
In a surprising twist, it wasn't flashy AI features that finally nudged longtime iPhone users to upgrade — it was tariffs. Wall Street analysts have been predicting a major iPhone upgrade cycle since Apple started integrating generative AI into the devices about a year ago. It hasn't really happened yet. However, fears of impending price hikes due to tariffs drove a notable surge in iPhone purchases in the first quarter of 2025, according to data from Consumer Intelligence Research Partners. This wasn't a marginal blip. The percentage of US iPhone buyers retiring phones three years or older hit 39% in this recent period. That's up from a steady 30% in previous quarters. "That is a significant shift," CIRP founders Michael Levin and Josh Lowitz wrote in a note to clients on Wednesday. "The threat of tariff-induced price increases really moved the needle." This shift marks a significant behavioral change among iPhone users, particularly those known for holding onto their devices the longest. Since the end of two-year carrier subsidies, and thanks to more durable hardware and better battery life, consumers have been upgrading less frequently. But the looming specter of higher prices changed the calculus for many iPhone owners. Long-term users, typically more cost-conscious than tech-hungry early adopters, decided it was better to buy now than risk paying more later. Interestingly, the tariff scare didn't inspire a blanket rush to upgrade across all user types. Those who already upgrade frequently, often after just one or two years, didn't significantly alter their patterns, according to CIRP's findings. Instead, it was the "delayers" — users who cling to aging devices — that made the leap. For them, this iPhone upgrade was less about chasing AI innovation and more about necessity: replacing a failing phone before the price tag climbed out of reach. Apple is a utility The data confirms what I told BI readers about earlier this year: an iPhone is a utility now for most people. We don't care about the whiz-bang new features, we just need it not to break for as long as possible so we can run our increasingly digital lives. Long-term iPhone owners don't upgrade for status or the latest camera specs; they upgrade when holding off any longer becomes riskier than making a purchase. This cohort, often overlooked in flashy product launches, just made a major impact on Apple's quarterly sales. What remains to be seen is whether this bump is a one-time blip or the start of a new pattern. If macroeconomic concerns continue to shape tech-buying habits, Apple and its competitors may need to rethink how they target and serve this "long-hold" user base. For now, though, it seems a little tariff fear went a long way in moving a notoriously cautious segment of the market. Will future pricing fears continue to drive these pragmatic upgraders into the Apple Store sooner than expected? Time, and tariffs, will tell.
Observer
27-02-2025
- Business
- Observer
Amazon unveils Alexa+, powered by generative AI
Amazon's Alexa is undergoing its biggest overhaul since debuting more than a decade ago. On Wednesday, Amazon said it was giving Alexa a new brain powered by generative artificial intelligence. The update, called Alexa+, is set to make the virtual assistant more conversational and helpful in booking concert tickets, coordinating calendars and suggesting food to be delivered. Alexa+ will cost $19.99 a month or be included for customers who pay for Amazon's Prime membership program, which costs $14.99 a month. It will begin rolling out next month. 'Until right this moment, right this moment, we have been limited by the technology,' Panos Panay, the head of Amazon's devices, said at a media event. 'Alexa+ is that trusted assistant that can help you conduct your life and your home.' With the changes, Amazon is aiming to catch up in generative AI for everyday users. While the Seattle company has in recent months made up for lost time in AI products and services that it sells to businesses and other organizations, its grip on consumer AI products has been narrower. Alexa's upgrades, which were first teased in 2023, are Amazon's biggest bet on becoming a force in consumer AI. The moves are also an opportunity to reboot Alexa, which has been perceived as having fallen behind other virtual assistants. In recent years, Alexa's growth in the United States has generally stagnated, according to the research firm Consumer Intelligence Research Partners, with people turning to the assistant for only a few main tasks, such as setting timers and alarms, playing music and asking questions about the weather and sports scores. At Wednesday's event, Panay and other Amazon executives demonstrated how Alexa+ could do those things in a more personalized manner. Alexa+ could identify who was speaking and know the person's preferences, such as favorite sports teams, musicians and foods, they said. They also showed how a device powered by Alexa+ could suggest a restaurant, book a reservation on OpenTable, order an Uber and send a calendar invitation. Alexa, which was a brainchild of Jeff Bezos, Amazon's founder, debuted in 2014, wowing people with its ability to take verbal requests and translate them into actions. It became a symbol of Amazon's innovation. Over the years, the company has highlighted some Alexa-connected devices, including Echo speakers, a connected microwave, a wall clock and a twerking teddy bear. But wild experimentation has been out since Bezos stepped down as Amazon's CEO in 2021 and handed the company over to Andy Jassy, a longtime executive. Jassy reined in Amazon's expenses, killed some projects that appeared to have no obvious prospects and oversaw layoffs. In 2023, he hired Panay, a Microsoft executive, to oversee devices. Panay's top responsibility was to bring generative AI to Alexa and to unlock the promise of the all-helpful assistant that Amazon had long envisioned. Soon after Panay started, Amazon said it was rebuilding Alexa's brain with the kind of technologies that underpinned OpenAI's ChatGPT chatbot. 'The re-architecture of all of Alexa has happened,' Panay said Wednesday. As Amazon worked to update Alexa, competitors leapfrogged it. ChatGPT, for example, can hold extended, in-depth conversations, with some people developing emotional — and even sexual — relationships with AI personas. (The New York Times has sued OpenAI and its partner, Microsoft, claiming copyright infringement of news content related to AI systems. The companies have denied the claims.) Bringing generative AI to Alexa was not easy because the virtual assistant faces challenges that a chatbot does not. Alexa might serve multiple users in a household, for instance, so it needs to distinguish who is speaking and personalize the responses. Amazon also wants Alexa to be at the center of people's lives and connected to multiple smart devices and services, which is complicated. It must integrate multiple AI systems, including ones built by Amazon and the startup Anthropic, and interact with devices such as smart lightbulbs and with apps including Ticketmaster. Amazon also gave Alexa+ a personality, even training it with comedians to make it funny. 'In the fall, it was just too slow,' Panay said in an interview. Generative AI has also been afflicted by 'hallucinations,' or when the AI systems serve up incorrect information. Because Alexa interacts with the real world — playing a song, ordering a product, turning off an alarm — Panay said Alexa had to reliably get things right. He said he believed Alexa+ was finally both fast and accurate. 'I think people will fall in love with it pretty quickly.' This article originally appeared in
New York Times
26-02-2025
- Business
- New York Times
Amazon Unveils Alexa+, Powered by Generative A.I.
Amazon's Alexa is undergoing its biggest overhaul since debuting more than a decade ago. On Wednesday, Amazon said it was giving Alexa a new brain powered by generative artificial intelligence. The update, called Alexa+, is set to make the virtual assistant more conversational and helpful in booking concert tickets, coordinating calendars and suggesting food to be delivered. Alexa+ will cost $19.99 a month or be included for customers who pay for Amazon's Prime membership program. It will roll out next month. 'Until right this moment, right this moment, we have been limited by the technology,' Panos Panay, the head of Amazon's devices, said at a media event. 'Alexa+ is that trusted assistant that can help you conduct your life and your home.' With the changes, Amazon is aiming to catch up in generative A.I. for everyday users. While the Seattle-based company has in recent months made up for lost time in A.I. products and services that it sells to businesses and other organizations, its grip on consumer A.I. products has been narrower. Alexa's upgrades, which were first teased in 2023, are Amazon's biggest bet on becoming a force in consumer A.I. The moves are also an opportunity to reboot Alexa, which has been perceived as having fallen behind other virtual assistants. In recent years, Alexa's growth in the United States has generally stagnated, according to the research firm Consumer Intelligence Research Partners, with people turning to the assistant for only a few main tasks, such as setting timers and alarms, playing music and asking questions about the weather and sports scores. At Wednesday's event, Mr. Panay and other Amazon executives demonstrated how Alexa+ could do those things in a more personalized manner. Alexa+ could identify who was speaking and know their preferences, such as favorite sports teams, musicians and foods, they said. They also showed how a device powered by Alexa+ could suggest a restaurant, book a reservation on OpenTable, order an Uber and send a calendar invite. Alexa, which was a brainchild of Jeff Bezos, Amazon's founder, debuted in 2014, wowing people with its ability to take verbal requests and translate them into actions. It became a symbol of Amazon's innovation. Over the years, the company has highlighted some Alexa-connected devices, including Echo speakers, a connected microwave, wall clock and twerking teddy bear. But wild experimentation has been out since Mr. Bezos stepped down as Amazon's chief executive in 2021 and handed the company over to Andy Jassy, a longtime executive. Mr. Jassy reined in Amazon's expenses, killed some projects that appeared to have no obvious prospects and oversaw layoffs. In 2023, he hired Mr. Panay, a Microsoft executive, to oversee devices. Mr. Panay's top responsibility was to bring generative A.I. to Alexa and to unlock the promise of the all-helpful assistant that Amazon had long envisioned. Soon after Mr. Panay started, Amazon said it was rebuilding Alexa's brain with the kind of technologies that underpinned OpenAI's ChatGPT chatbot. 'The re-architecture of all of Alexa has happened,' Mr. Panay said on Wednesday. As Amazon worked to update Alexa, competitors have leapfrogged it. ChatGPT, for example, can hold extended, in-depth conversations, with some people developing emotional — and even sexual — relationships with A.I. personas. (The New York Times has sued OpenAI and its partner, Microsoft, claiming copyright infringement of news content related to A.I. systems. The companies have denied the claims.) Bringing generative A.I. to Alexa was not easy because the virtual assistant faces challenges that a chatbot does not. Alexa might serve multiple users in a household, for instance, so it needs to distinguish who is speaking. Amazon also wants Alexa to be at the center of people's lives and connected to multiple smart devices, which is complicated. Rohit Prasad, who heads the development of Amazon's A.I. systems, said in an interview last year that he had 23 different devices, like smart lightbulbs, controlled through his Alexa system. 'It's extremely hard to do that right, with high reliability, every day,' he said. Generative A.I. has also been afflicted by 'hallucinations,' or when the A.I. systems serve up incorrect information. Because Alexa interacts with the real world — playing a song, ordering a product, turning off an alarm — customers must see Alexa as a reliable assistant, Mr. Prasad said. 'You cannot afford the kind of hallucination rates that can happen if you're executing your light switches,' he said.
Egypt Independent
25-02-2025
- Business
- Egypt Independent
Apple needs the iPhone 16e to be a hit. Here's why it has a chance
CNN — Apple's iPhone 16e debut was surprising for two reasons: First, the company shifted away from the 'SE' branding after nearly a decade. Then it priced the budget phone higher than expected at $599 — a notable jump from the $429 iPhone SE. The iPhone 16e, which launches on February 28, is Apple's latest effort to diversify its iPhone lineup and prove the company's 18-year-old signature product can still appeal to new audiences. The iPhone is the driving factor behind Apple's nearly $4 trillion market cap, generating $69.1 billion of the $124.3 billion in revenue Apple reported for its first fiscal quarter of 2025. The launch comes after Apple's previous budget phones have seen mixed success. Data from market research firm Consumer Intelligence Research Partners suggests the iPhone SE only accounted for 5 percent of US iPhone sales for the quarter ending on December 31, 2024. Globally, the iPhone SE only made up 1 percent of Apple's iPhone sales last year, according to Counterpoint Research. The iPhone Mini, a smaller and less expensive model launched in 2020, was cut from the iPhone family after just two generations. The higher price of the iPhone 16e raises questions about whether it would appeal to budget-minded shoppers. But despite the cost, the new budget smartphone could draw in more consumers, mostly because Apple is seemingly following a successful strategy from roughly seven years ago with the iPhone XR. Apple is taking a different direction with the iPhone 16e The iPhone 16e has largely been perceived as an iPhone SE replacement. It launched during the same timeframe Apple has historically introduced new SE models, and the company removed the iPhone SE from its online store after the announcement. But the iPhone 16e is more like a successor to the iPhone XR, which was introduced in 2018 alongside the iPhone XS for those who wanted a more affordable device with many of the same qualities. With the iPhone XR and now the iPhone 16e, Apple prioritized screen size, battery life and performance, instead compromised on camera hardware to cut costs. That strategy seemingly paid off with the iPhone XR. It was the best-selling phone globally in the third quarter of 2019, according to Counterpoint Research. Apple didn't release a new version of the iPhone XR in 2019. But its next-generation iPhone at the time, the iPhone 11, took a lot of cues from the XR in terms of design and pricing. An iPhone SE next to an iPhone 12 Mini in March 2022. Melina Mara/TheAlthough the iPhone 16e isn't on sale yet, some analysts believe it could be more popular than the iPhone SE. That's partially because of its larger screen, says Gerrit Schneemann, a senior analyst in Counterpoint Research's smartphone division. The iPhone 16e has a 6.1-inch display, the same size as the iPhone 16, while the iPhone SE had a 4.7-inch screen. '(Apple is) giving up on that kind of smaller form factor and realizing that people are interested in a larger display,' Schneemann said to CNN. 'Even if it means discarding the $400 entry price.' Before the iPhone 16e reveal, Ming-Chi Kuo, a TF International Securities analyst known for being tapped into Apple's supply chain, predicted that Apple's next budget phone would sell 'slightly better' than the previous iPhone SE. But there are reasons to be skeptical. At $599, the iPhone 16e still commands a high barrier to entry, especially compared to the price of some Android phones. And there's the question of whether the iPhone 16e may detract from iPhone 16 sales, as Bank of America analyst Wamsi Mohan wrote in a note to investors on February 19. 'They have to be really careful to offer enough in this device that it is worth $600 to a buyer, but not offer so much that someone that would spend $1,300 or even $1,000 picks it over that,' Daniel Newman, CEO of the technology research firm The Futurum Group, told CNN. Why the iPhone 16e is important for Apple Multiple iPhone 16e phones with the new C1 cellular modem are stress tested at an Apple lab in Sunnyvale, California, on February 18, 2025. Stephen Nellis/Reuters Apple's flagship iPhones usually steal the spotlight, and for good reason. The more expensive Pro and Pro Max models tend to be the most popular globally, according to data from market research firm Kantar, a trend that likely keeps Wall Street happy by boosting the iPhone's average selling price. But the iPhone 16e could help Apple tap into an audience that may otherwise opt for an older secondhand iPhone or an Android phone. It could also help Apple better compete in the Chinese market, where it faces heightened rivalry from regional brands like Huawei and Xiaomi. But perhaps most importantly, the iPhone 16e could be critical in popularizing Apple's technologies and apps, especially as it seeks to grow its services business to reduce its reliance on iPhone revenue. Putting Apple Intelligence in the iPhone 16e means that even those who don't want to pay $800 or more for a new phone can access Apple's AI tools. And getting Apple Intelligence in the hands of more consumers is crucial for the iPhone maker as Google, Microsoft, Samsung and other rivals are going all-in on AI. 'Apple really needs to win,' Newman said, referring to winning over Android fans and budget phone shoppers. '…Its whole AI strategy and its intelligence strategy and its app strategy for the future is really where I think its biggest growth opportunity comes.'
