iPhone 16, which was marketed as the first artificial intelligence (AI) powered smartphone by Apple (NYSE: AAPL), recently went on sale. A section of the market is quite bullish on the model and believes that it would help drive Apple’s sales. However, Bloomberg’s Apple expert and journalist Mark Gurman has slammed the model and says it is only incrementally better than its predecessor and accused the company of using “disingenuous’ marketing’ while advertising the model.

The iPhone 16 may have been marketed as the first AI smartphone but it turns out that it shipped without any of those AI features. Apple revealed “Apple Intelligence” at its WWDC event in June and the company is quite upbeat about the feature.

“All of this goes beyond artificial intelligence. It’s personal intelligence, and it’s the next big step for Apple,” said the company’s CEO Tim Cook at the WWDC. He added, “We think Apple Intelligence is going to be indispensable to the products that already play such an integral role in our lives.”

Mark Gurman Accuses Apple of “disingenuous marketing”

Apple talked highly about the features during the fiscal Q3 earnings call last month. However, the iPhone 16 will finally get Apple Intelligence in stages beginning next month. Also, there is still no clarity on when (and whether) these features will be offered in China and Europe as the company engages with regulators there over data privacy concerns.

Gurman accuses AAPL of not being honest in the iPhone 16 marketing campaign. “This is where Apple is being a little disingenuous with its marketing. The company claims the iPhone 16 is the first model “built from the ground up for Apple Intelligence.” The reality is that the processor and other hardware in the new iPhones isn’t meaningfully better for AI. The key factor is having 8 gigabytes of memory, the minimum required to run Apple Intelligence,” said Gurman.

He also slammed the company for little innovation in hardware and said that even its AI efforts were a couple of years behind competitors. Notably, the Apple iPhone 16 has had mixed reviews and most observers believe that it at best offers incremental features and Apple Intelligence remains the only major change as compared to the iPhone 15.

In his review of the iPhone 16, famous YouTuber Marques Keith Brownlee, also known professionally as MKBHD also found it was not too different from the iPhone 15. Importantly, while at the iPhone launch event Apple said that the iPhone 16 Pro Max has the “best iPhone battery life ever,” Brownlee did not find any noticeable change. You can check his full review in the video below.

Apple Has Been Accused of Misleading Ads in The Past Also

According to Gurman, “If Apple felt that the hardware changes were enough of a selling point, it would have focused its marketing pitch around those features.”

He added, “Instead, it has zeroed in on Apple Intelligence in spite of the drawbacks. Most consumers won’t have access to the software for weeks — with some features not coming until next year — and it’s still nowhere near as capable as rival AI systems.”

This could be a major problem for the rollout of the iPhone 16 as Apple Intelligence is its entire unique selling point (USP). Consumers are basically putting money into a phone expecting Apple to come up with something spectacular later on (though Apple has a great track record).

Meanwhile, it is not the first time that the Cupertino-based company has been accused of deceitful advertising. In 2012, it faced class lawsuits alleging that Siri did not perform the way Apple advertised. However, the lawsuits were dismissed as the plaintiffs could not provide sufficient evidence of misrepresentation by Apple.

The same year though Apple had to offer refunds to buyers who felt misled by the company into believing that the new iPad works on a 4G network in Australia. “Apple’s recent promotion of the new ‘iPad with wi-fi + 4G’ is misleading because it represents to Australian consumers that the product can, with a sim card, connect to a 4G mobile data network in Australia, when this is not the case,” said The Australian Competition and Consumer Commission.

In a piece of unrelated news, earlier this year researchers at Israeli firm EVA Information Security found that nearly 3 million iOS and macOS apps were exposed to supply chain attacks. The findings run contrary to Apple’s well-advertised focus on privacy and security.

Apple Ads in 2024 Have Been Controversial

TBWA\Media Arts Lab has been Apple’s exclusive ad agency for years now and for most of that time it has been a fantastic asset. Many of the past Apple campaigns were received quite well and even if some were controversial like “The Garden of Eden” in 1979, which showed a naked man with an Apple computer, they were quite innovative and successful.

However, Apple’s advertisements have received a lot of flak this year. First, it had to apologize and pull a new iPad ad saying it “missed the mark.” The ad, titled “Crush!”, showed an industrial press crushing multiple creative objects including books, a guitar, a piano, an old TV set, cameras, a typewriter, and a classic arcade game machine, and transforming them into a thin iPad with the compression soundtracked to Sonny & Cher’s “All I Ever Need Is You.”

While AAPL CEO Tim Cook originally said that the ad talks about creation and tweeted, “Just imagine all the things it’ll be used to create,” most users online slammed the ad for being too destructive and portraying the submergence of human creativity into a gadget.

More recently, the company had to remove its “Underdogs” advertisement and apologize after it showed wrongly Thailand as an underdeveloped country.

aapl revenues

For AAPL, A Lot Is Riding on iPhone 16

Meanwhile, for Apple, a lot is riding on the iPhone 16. Smartphones are the biggest revenue driver for Apple, bringing in $39.30 billion in the most recent quarter. iPhones accounted for over 45% of Apple’s total revenues. They also build the company’s profitability flywheel by expanding the installed device base which then drives the revenues of Apple’s Services business – its most profitable business segment.

While Apple was believed to have trailed in its AI efforts, the company is trying to dispel those fears with iPhone 16 – or rather Apple Intelligence. However, with the iPhone 16 offering a marginal improvement over its predecessor, the company has been aggressively marketing that product which at least some find disingenuous.

In what could be worrying for AAPL stock bulls, Gurman believes that “Even if all of Apple Intelligence was available today — including the emoji generator called Genmoji, Image Playground and the new Siri — there’s little here that makes these iPhones a must-buy.”

With Apple facing intense competition in China and fears that its AI efforts have lagged behind tech peers, the last thing AAPL would want now is its iPhone 16 failing to meet expectations.