Apple’s 2024 was defined by its ambitious entry into artificial intelligence, marking a pivotal year for the tech giant as it navigated both innovation and significant market challenges. The company officially launched Apple Intelligence at its Worldwide Developers Conference in June, representing its long-awaited response to the AI revolution sparked by OpenAI’s ChatGPT in 2022. This move was described by Morningstar technology analyst William Kerwin as the “biggest story” of Apple’s year.
The company introduced the iPhone 16 in September, marketed as the first iPhone “built from the ground up to deliver Apple Intelligence.” Starting at $999 for the Pro model, the device launched without AI features initially, which were added through later iOS updates. Features include Writing Tools, AI-generated emojis, and ChatGPT integration through Siri, though not all promised capabilities have materialized yet. Wedbush Securities analyst Dan Ives predicted the AI-enabled iPhone would trigger a “golden upgrade cycle” and “multi-year supercycle” as the AI Revolution reaches consumers.
Apple strategically partnered with OpenAI to bring ChatGPT to new iPhones, addressing criticism about being late to the AI arms race compared to competitors like Google and Microsoft. According to Gene Munster of Deepwater Asset Management, Apple “caught up by partnering and by adding AI to something only Apple can do.”
However, China remained a significant pain point throughout 2024. iPhone 15 sales were “lackluster” as local competitors Huawei and Xiaomi intensified competition. China sales missed estimates and dropped year-over-year in fiscal Q4, despite CEO Tim Cook’s claims of “positive signs.” Cook made at least three trips to China amid concerns about potential Trump tariffs affecting manufacturing. Apple is reportedly exploring partnerships with local companies to bring Apple Intelligence to Chinese iPhone users.
Beyond AI, Apple launched the $3,500 Vision Pro headset in February, though it met weak demand and limited use cases. The company also faced antitrust scrutiny, including a DOJ lawsuit alleging illegal smartphone monopoly practices and a $2 billion EU fine. Apple canceled several projects, including its electric car initiative and iPhone subscription service, reassigning talent to AI efforts—a move Munster called part of a “one-two combo” that helped Apple catch up in artificial intelligence.
Key Quotes
2024 has been a year of notable highs and lows for Apple as it expanded into mixed reality and AI while navigating shifting consumer preferences and market dynamics
Jacob Bourne, tech analyst at EMARKETER, summarized Apple’s challenging year balancing innovation in AI and mixed reality with market pressures, particularly in China and amid antitrust scrutiny.
They caught up by partnering and by adding AI to something only Apple can do
Gene Munster of Deepwater Asset Management explained how Apple’s strategy of partnering with OpenAI and integrating AI into its unique ecosystem allowed the company to overcome criticism about being late to the AI race.
We believe iPhone 16 has kicked off a multi-year supercycle for Apple as the AI Revolution comes to the consumer
Dan Ives, global head of technology research at Wedbush Securities, expressed optimism that Apple’s AI-enabled iPhone would drive sustained upgrade cycles, bringing artificial intelligence to mainstream consumers at unprecedented scale.
China’s just been a disappointment in ‘24, full stop
Gene Munster bluntly assessed Apple’s performance in its crucial Greater China market, where local competitors and weak iPhone 15 sales created ongoing challenges despite CEO Tim Cook’s optimistic statements.
Our Take
Apple’s 2024 trajectory reveals a company executing a calculated catch-up strategy in AI while managing significant geopolitical and competitive pressures. The decision to partner with OpenAI rather than develop everything internally demonstrates pragmatic recognition that speed to market matters more than proprietary technology in the current AI landscape. This approach contrasts sharply with Google and Microsoft’s vertically integrated AI strategies.
The China situation exposes a critical vulnerability: as AI becomes more central to Apple’s value proposition, regulatory fragmentation could force the company to maintain separate AI ecosystems for different markets. This fragmentation may ultimately undermine the seamless experience Apple is known for. The cancellation of the Apple Car to redirect resources toward AI was strategically sound, but the real test comes in 2025 when promised Apple Intelligence features must deliver tangible value that justifies premium pricing and drives the predicted upgrade supercycle.
Why This Matters
Apple’s 2024 AI pivot represents a watershed moment for consumer artificial intelligence adoption. As the world’s most valuable tech company with over 1 billion iPhone users, Apple’s integration of AI into its ecosystem could accelerate mainstream AI acceptance far beyond what specialized tools like ChatGPT have achieved. The company’s approach—embedding AI directly into hardware through the iPhone 16 and partnering with OpenAI rather than building everything in-house—establishes a new model for AI deployment that prioritizes user experience over technological firsts.
The China challenges highlight geopolitical risks in AI development and deployment. Apple’s struggle to bring Apple Intelligence to Chinese users due to regulatory requirements foreshadows broader tensions as AI becomes increasingly central to consumer technology. With China representing a crucial market and manufacturing hub, Apple’s ability to navigate these complexities will influence how global tech companies balance innovation with regional compliance.
The predicted “supercycle” of iPhone upgrades driven by AI features could validate AI as a genuine consumer value proposition rather than just enterprise technology, potentially triggering massive investment shifts across the industry.
Recommended Reading
For those interested in learning more about artificial intelligence, machine learning, and effective AI communication, here are some excellent resources:
Recommended Reading
Related Stories
- Apple Q4 Earnings Preview: Wall Street Sees AI Fueling iPhone Demand in 2024
- Apple Stock Price Outlook: Buy the Dip as Value Investor Warren Buffett Bets on iPhone16 in 2024
- Apple’s Vision Pro headset brings AI to the forefront
- The DOJ’s Google antitrust case could drag on until 2024 — and the potential remedies are a ’nightmare’ for Alphabet