Faced with declining revenues, Apple was forced to show what it would offer buyers to revive iPhone sales.
The tech giant unveiled its cards — the iPhone 16 — which features a camera button on the outside of the device.
This button is an external hint of the changes Apple claims to have made inside its latest smartphone, aiming to leverage the latest advances in artificial intelligence (AI).
Apple CEO Tim Cook said these improvements would "push the boundaries of what a smartphone can do," but the company faces fierce competition as other brands have already integrated generative AI features into their handsets.
Apple's stock price dropped during the "Glowtime" event, where the company unveiled the iPhone 16 along with other products, and ended the day unchanged. The $3 trillion company fears losing its lead in the rapidly growing field of artificial intelligence.
iPhone sales — Apple's most important product, accounting for about half of its total revenue — have stagnated in recent months. They fell 1% over the nine-month period ending June 29, compared to the previous year.
Apple stated that its new phones, with more durable batteries, more powerful chips, and enhanced privacy features, are the first designed specifically to handle AI and its new "Apple Intelligence" tools, most of which were announced in June.
These include new tools for writing and creating new emojis, as well as the integration of OpenAI's ChatGPT chatbot into Siri to help users formulate specific requests and generate text.
Apple also announced updates to its Apple Watch and AirPod headphones, which will automatically lower the volume when users start in-person conversations and reject calls by shaking their heads.
Apple stated that the Pro version of its AirPods could be used as a personal hearing aid of "clinical quality" for people with mild to moderate hearing loss.
The company said it was awaiting "soon" regulatory approval for the device's commercialization, and the feature would be available this fall in over 100 countries, including the U.S., Germany, and Japan.
Previously, the company offered a feature allowing hearing aids to pair with iPhones and other devices.
The products were presented at a prestigious event, during which protesters gathered in a free speech zone across the street, urging leaders to step up efforts to protect children from harmful content on the company's App Store.
The protest was marked by the presence of a life-size figurine resembling Mr. Cook.
Sales of the new range will begin in September, with the iPhone 16 starting at $799.
However, the Apple Intelligence features will only be available on operating systems starting in October, first in the U.S., followed by other countries in the months thereafter. They will be available in the U.K. in December.
Ben Wood, chief analyst at market research firm CCS Insight, said it was likely that many people would dismiss the company's new camera control as a "glorified shutter button."
But he said it offered "very important" improvements, including AI-powered visual search, and he came away from the presentation convinced that Apple would attract customers.
"The combination of Apple Intelligence and the new camera features on the iPhone 16 will help encourage Apple's loyal customers to upgrade," he said. "Especially since Apple is positioning this latest update as a future-proof purchase for customers wanting to take advantage of the Apple Intelligence features as they roll out in the coming years."
Apple has been slower than rivals Samsung and Google to integrate generative AI features for photo editing, translation, and web browsing into its devices.
Competitors are now incorporating these features into foldable, reversible, and even tri-fold smartphones.
Pre-orders for Huawei's new foldable phone, the Mate XT, reportedly exceeded three million on Monday.
Annette Zimmermann, an analyst at Gartner, said Apple was launching AI-ready smartphones later than its rivals, and it was "essential" that they live up to expectations.
She warned that rolling out these features before they were ready could jeopardize the company's reputation or lead to revenue losses.
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