Apple iPhones aren't coming with AI software. Here's why it doesn't matter.

• Apple launched its new iPhone 16 lineup on Friday.
• Customers from SF to NY told BI they don't mind that the new phones don't include AI.

When eager customers lined up outside Apple stores in San Francisco on Friday to upgrade to the latest iPhone 16 and 16 Pro, their new purchases had a glaring omission.

Apple Intelligence, the AI feature analysts believe will spark a consumer rush to update their iPhones, Business Insider previously reported, was not installed in the new iPhones straight out of the box. The feature — which includes an AI-powered Siri, an image generator, and AI-generated emojis — will instead be released through several software updates starting in October.

Ron Witt, a San Francisco resident and loyal iPhone user who recently upgraded from an iPhone 15 Pro, told Business Insider that Apple Intelligence piqued his curiosity.

"Excited isn't the right word," he said. "I think I'm more intrigued."

For Witt, and many customers who spoke with BI, Apple Intelligence wasn't the main draw to upgrade.

"It's always the camera for me," Witt said, adding that he's used an iPhone since the device launched 17 years ago.

Another customer said that his phone was just too old. Some told BI that they were just serial upgraders.

In New York, meanwhile, customers who lined up outside Apple's flagship Fifth Avenue Store included those who wanted to upgrade old phones and those who switch to the latest model every time they can.

Saul Campos said he purchases a new iPhone annually, and this year was no different.

"For the most part, I'm in it for the cameras because I take a lot of pictures, and they upgrade them every year," Campos told BI, noting he's excited for the Camera Control button, which allows users to slide their finger across it for camera controls — zooming in, adjusting the focus, or pressing it to snap a photo or video.

Outside Apple's flagship store in Manhattan on Friday, Apple CEO Tim Cook told CNBC that it's too early to speak on how the demand compares to last year but said that "everything is enthusiastic."

Experts, too, said the excitement outside Apple stores this weekend was palpable. In a post on X on Friday, Mark Gurman, Bloomberg's resident Apple guru, wrote that "the lines this morning have been impressive."

Despite the lines, the data shows that preorder sales took a hit this year — possibly due to the absence of Apple Intelligence. Apple supply chain expert Ming-Chi Kuo, who analyzed data on first-weekend preorder sales, said they were down about 12.7% year-over-year compared to the iPhone 15 series' first-weekend sales.

Kuo suspects two reasons for the dip. "One of the key factors for the lower-than-expected demand for the iPhone 16 Pro series is that the major selling point, Apple Intelligence, is not available at launch alongside the iPhone 16 release," he wrote in a post on Medium. Additionally, intense competition in the Chinese market continues to impact iPhone demand."

BofA Global Research also found that all iPhone 16 models were experiencing shorter global shipping times than last year's iPhone 15 models, suggesting lower demand, Reuters reported.

According to the report, the analysis looked at preorder data from three days after Apple made the new phones available for early purchase. The average global shipping time for the iPhone 16 was 7 days compared to 9 days for the iPhone 15. Shipping times for the 16 Pro Max were 11 days compared to 19 days for the 15 Pro Max.

But Gil Luria, Apple analyst for D.A. Davidson, told Reuters that the early preorder data is negligible and surmised that, as the AI features are rolled out gradually, "the upgrade cycle will likely materialize over the next 12-18 months."

The level of draw Apple Intelligence will have on customers is also in question.

A survey published September 4 by Consumer Intelligence Research Partners, which Techradar reported on, showed that 44% of respondents are upgrading because they feel their phone is "obsolete." Only 18% of respondents said they were upgrading for the "new features."

Witt, the SF resident, told BI that he remembered the hype around the first iPhone years ago when he was in downtown San Francisco. Apple has since implemented an online ordering system that helps reduce long wait times, but overall, Witt said nothing compares to the excitement when the first iPhone was released.

"It's much more tame now," Witt said.

A spokesperson for Apple did not respond to a request for comment sent during the weekend.