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The AI revolution at Apple does not need to happen overnight. The reviews on Wall Street are mixed concerning Monday's iPhone launch event. Much of the analysis centered on what we
heard on stage about the new artificial intelligence-enabled device. For us, Monday's announcements were not the endgame. They are just the beginning. Jim Cramer on Tuesday took issue
with some of the analysts' commentary, which included Bernstein calling the event underwhelming and Citi and JPMorgan occupying the no-surprises camp. Jim cited the totality of the
capabilities of the new iPhone 16 from artificial intelligence to longer battery life to better cameras. "All of these things will be incremental, just enough to eventually convince
millions" over time to upgrade their devices, he added. The iPhone 16 supports the idea that investors should own the stock for the long-term, rather than try to trade in and out based
on when more AI features start to launch. The refresh cycle should not be viewed, nor would we want it to be, as a one-quarter event. If it means we shave the upgrade cycle down by 6 to 12
months, that's huge. We came away from Apple's product launch event incrementally more positive in our view that the iPhone 16 is the upgrade catalyst we've been waiting for.
Apple Intelligence represents a paradigm shift for the company and the iPhone 16 is the ticket into this new generation. If we take a step back and look at the history of Apple, there have
been four major transitions that got us to where we are today. It all started with the computer, the first generation of the company. From there, Apple moved into music with the launch of
the iPod, the second generation. The company's next major milestone was the iPhone, the third generation, followed by the launch of services and the App Store, the fourth generation.
Apple Intelligence is the next step, the fifth generation, a shift that will completely revamp how we think about and engage with our personal devices. Time will tell just how big a change
this is but what we saw at Monday's event was enough to understand that the iPhone 16 represents the future, one in which Siri is more personalized and helpful than ever and all apps
start to become smarter. Whether they are enhanced with machine learning in the camera app, helping to get the best shot or improved notification summaries, everything is getting an upgrade.
How fast these Apple Intelligence upgrades hit new devices will dictate the pace of upgrades but what Apple announced gives us confidence that it is indeed on the verge of shortening the
refresh cycle. If we think back to Nvidia in 2018, we saw a similar dynamic. In 2018, Nvidia unveiled RTX Ray Tracing technology — groundbreaking stuff in the world of computer graphics. The
issue at the time was there were not any software or video games taking advantage of it. So, despite being a groundbreaking innovation, we didn't see real upgrade demand come until the
software caught up. It's kind of like that now at Apple. The hardware is there, but the software is where we get to the use case. That's what will in turn drive demand, both in
terms of Apple rolling out Apple Intelligence and developers taking advantage of the new hardware capabilities. Fortunately, Apple has a fast-growing services business to smooth out this
process, and there are many people waiting to upgrade devices regardless of AI. To be sure, we wouldn't expect to see the same volatility in shares of Apple now that we saw with shares
of Nvidia back then. The iPhone 16 and the Pro models will be equipped with versions of the new A18 chips. The iPhone 15 Pro models are the only previous devices that can run Apple
Intelligence. However,even those phones weren't built from the ground up in the way the iPhone 16 is to harness the full power of Apple's AI features. Anyone used to a large
language model such as ChatGPT from Microsoft -backed OpenAI, or Gemini from Alphabet 's Google, or Meta AI, will realize that generative artificial intelligence is very real and
incredibly useful. We're all still working to figure out just how big a change it is. But the fact that it's a material change is hard to dispute. (Jim Cramer's Charitable
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IS GUARANTEED. 09 September 2024, USA, Cupertino: Apple presents the new iPhone 15 at an innovation event at the company's headquarters. Photo: Andrej Sokolow/dpa (Photo by Andrej
Sokolow/picture alliance via Getty Images) Picture Alliance | Picture Alliance | Getty Images The AI revolution at Apple does not need to happen overnight.