Apple’s iPhone 16 Disappoints Investors Amidst Huawei’s Tri-Fold Phone Launch
Limited AI Features and Static Design Impact Apple Shares; Huawei’s New Device Raises Competitive Stakes
Apple’s latest release, the iPhone 16, has failed to excite investors, with anticipated artificial intelligence (AI) features still in testing mode. This comes as Huawei unveiled its industry-first tri-fold phone, adding pressure in the global smartphone market.
Apple’s stock dropped 1.7% on Tuesday following the unveiling of the new iPhones. While the iPhone 16 incorporates hardware-level integration for AI applications, including enhancements for Siri and the camera, the device features minimal external design changes. The AI capabilities, branded as Apple Intelligence, will be available in beta for U.S. iPhones next month, potentially delaying upgrades for many users.
“Apple’s core message for the iPhone 16 seemed to be that next year will bring more substantial improvements,” noted Needham analyst Laura Martin. The company did not specify when the AI features will move beyond the testing phase or announce a Chinese partner to support its AI initiatives.
The lack of immediate AI functionality in the new iPhones has faced criticism in China, where generative AI-based chatbots must be vetted before public release. A Weibo hashtag, “iPhone 16 Chinese version doesn’t support AI yet,” garnered 11.33 million views and over 1,500 comments. Critics questioned the value of the device without advanced AI features, suggesting it should be priced lower.
In response, Apple kept the prices of the new iPhones unchanged, a move analysts view as sensible given current consumer spending habits. Meanwhile, Huawei, which introduced its new Mate XT tri-fold smartphone shortly after Apple’s event, has set the price at $2,800.
“Despite production constraints and the high price, Huawei’s new phone signals its continued leadership in tech and represents a significant competitive challenge for Apple,” said Will Wong, senior researcher at IDC.
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Huawei’s Mate XT has already received over 4 million pre-orders, with no deposit required. The device features an AI assistant capable of text summarization, translation, and editing, along with AI-enhanced image editing functions.
Huawei’s recent string of successful launches, including the Mate 60 Pro with a domestically manufactured chip, highlights its resilience against U.S. sanctions and reinforces its competitive position in China, where Apple’s market ranking has dropped from third to sixth place. iPhone shipments in China fell by 6.7% in Q2 2024, according to Canalys.
Both the Mate XT and the iPhone 16 are set to go on sale on September 20.
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