Apple Prepares for iPhone SE Launch, Taps Alibaba for AI Expansion
Cupertino, California - Apple (AAPL) is reportedly preparing to launch its latest iPhone SE model next week, partnering with Alibaba (BABA) to roll out its Apple Intelligence platform in China.
Despite the company's positive outlook, Jefferies analyst Edison Lee expresses caution due to the iPhone SE's reported single rear camera and Apple Intelligence's underwhelming performance so far.
The iPhone SE, priced between $400 and $500, is expected to resemble the iPhone 14 with Face ID, an expanded display, and an upgraded processor. Its key feature is Apple Intelligence, offering AI capabilities such as notification summaries and photo editing.
While Apple hopes to attract more users by offering AI on a lower-cost iPhone, the platform's success remains uncertain. Sales of the iPhone 16, which features Apple Intelligence, have underperformed expectations.
Analyst Erik Woodring suggests iPhone sales may have benefited from discounted older models rather than Apple Intelligence.
Lee notes that Alibaba's involvement may face challenges due to Chinese users' preference for third-party apps, hindering Apple's ability to leverage data for personalized services.
Apple's China revenue has declined in recent quarters, but Deepwater Asset Management's Gene Munster believes the Alibaba partnership could mitigate headwinds. However, he emphasizes the need for Apple to execute effectively and adapt its pricing strategy.
Apple Intelligence is still in its early stages and its potential remains to be seen. As it evolves and gains capabilities over time, it could become a significant offering, similar to the Apple Watch and AirPods, which initially faced skepticism but have become essential products.