Apple to launch new AI features as part of software update later today

We are going to talk about Apple this morning because it's expected to push out its latest AI features called Apple Intelligence to iPhones via a software update later today. For those folks who want to try it out on their own, Steve Kovach joins us now. He has been trying it out and let us know what we can look forward to or not. Probably not much. The first wave is going to launch today, like you said, but with an extremely limited set of features and only for the newest iPhones, Macs, and iPads. Now, this launch is coming at a time the street has been struggling to figure out what iPhone demand looks like. If you were hoping, though, to get that update today and to get a better and smarter Siri, you're going to be disappointed. Only two main features are coming, AI summaries of all your notifications and a new look for Siri, but Siri is just as bad as it's always been, but at least the screen is going to kind of glow when you activate it. The better AI features, like the chat GBT integration, generating custom emojis, those are several weeks away from launching by the end of the year. And then that big Siri update and integration with all your apps using AI, that's not expected until next year, but that still hasn't stopped Apple from marketing those features to prospective iPhone 16 buyers. In fact, that's pretty much all the ads talk about, but if you want to summarize your emails like Bella Ramsey is doing here, you're going to have to wait. Meantime, some sour commentary recently on iPhone 16 demand so far last week, you had the CEOs of AT&T and Verizon saying iPhone demand isn't as strong as last year, and they're unsure how long it's going to take for this AI rollout to change that. Meantime, analyst Ming-Chin Kuo of TF International Securities, he said Apple has cut iPhone 16 orders by 10 million. That's a little higher than usual for this time of year. Now you may be wondering why is this AI rollout taking so slow? Well, here's what Apple says at least. Apple software boss Craig Federighi, he told the Wall Street Journal, Apple wants to, quote, get each piece right and release it when it's ready. But that hasn't stopped CEO Tim Cook from hyping Apple Intelligence. He told WSJ Magazine, quote, it's changed my life, guys. So here's the question. We had a whole bunch of analysts come on and others who said that this was going to be some kind of super cycle. That this fall- Because of AI. Because of AI, you were going to feel so compelled to run out and get the new phone. And there were even some other folks who came on and said it'll be a super cycle. They'd get pulled through the entire year because as these new features roll out, it'll create a new sense of excitement each time the new feature rolls out and we talk about it on television, right? Okay. Yeah. Do we think that's the case now or do we think that that is- We're going to find out starting today. This is the first test. Now, some people have been testing these features early. I know you said your son has been testing it a little bit, maybe not super surprised or intrigued by it, but- And he thinks it's cool. And look, I think if you're a kid and you've got your friends and you want to be able to say you have it and the other guy doesn't have it, that's like a thing. There's a FOMO factor for sure. But again, the FOMO-inducing features, like those generative emojis that you can kind of create and send to each other, that's not going to happen until December. And then the real stuff, the thing that we've been waiting for forever, this real personal assistant where Siri understands all your apps and understands what you want to do, that's not coming until next year. So maybe we see this elongated. Maybe this upgrade cycle goes into the iPhone 17, like some analysts are saying. We heard from both AT&T and Verizon- That's what I- Yeah. Just saying that it wasn't- It sounds pretty crummy. And I mean, today, JPM is out with their analysts are out with a note. You just see words like muted demand or moderate demand compared to- I just wonder how much of that is we're holding onto our phones for a lot longer. That has been the story about the iPhone, Becky, for the last five or six years. And does it matter? I mean, if they get services and the rest of the other stuff that builds into the ecosystem- It might have. iPhone sales have been pretty crummy since coming out of COVID. And they've been doing, at least the stock has been doing just fine. Sales overall have been down. But services is picking up a lot of the slack. That business is on fire again, coming out of COVID. There was a little bit of a slump. People weren't spending as much in the app store. That's- What are we up to? It used to, for a while, people have kept their phone for two years. Now I think the average is what? Three plus? It's three plus, easily. Four? What's the- I don't know what the average is, but usually around this time, one of the other reasons for the super cycle where people are predicting is 2020 was the last big bump we got. That was because they introduced 5G into the phone for the first time. So if people saw that- I will also say, look, the phones are much more indestructible than they used to be. It used to be you drop it in the pool or something and you're done with it. You get software updates for six or seven years, at least. The only thing here that's different is this AI stuff is not available on those older phones. You need a 15 Pro from last year or better in order to use it. And then on the iMac side, some- What are the margins for the phones? Just because when you talk to AT&T and Verizon, they're like, they don't care. It's empty calorie revenue for them. Right. Well, they eat the cost. They don't make any money on it. They eat the cost. They pay Apple and then they recoup those losses. I don't know what the margins is on the phone. They just kind of do the whole, all the margins across the whole business. So I'm not sure. It's high. That's the answer. You can ask AI whether it's worth it to get- And what does it say? What'd you ask? Some users find it useful. Many analysts are arguing it's just not compelling enough to justify. They weren't looking at Dan Ives notes, I guess. That's what ChatGPT says? I don't disclose which AI that I use. Which agent you have? Right. You're using Grok? You're totally using Grok. I could use Grok. I could- No, no, no, no. You know, I know- I bet it's ChatGPT. I have one that- So you're using Perplexity. The easiest one for me to- It's the easiest- He doesn't know how to get to the others. No, I don't know how to- Don't I have to like sign up for the others? You have to sign up for all of them. I didn't have to sign up for this. Perplexity? No. All you do is just download the app and it works. I created an account. I love Perplexity. I don't like creating- I don't have a Google account. They asked me, what about Google? I don't have that. Do you use Google? For a search engine, but I don't have a Google. You don't have Gmail? You have a Hotmail account. I do not have Gmail. AOL. All my mail is hot, but I don't have a Hotmail.