Apple Pushes Into Visual AI, Halts Three iPhone Models to Prioritize AI‑Enabled Devices

Apple’s hardware roadmap now centers on “visual intelligence,” a term Tim Cook used in a Bloomberg Technology interview to describe the company’s next‑generation AI‑driven imaging stack (Bloomberg Technology, Feb 22). The shift is concrete: Apple has halted production of the iPhone 14, iPhone SE 3, and the low‑end iPhone 15 models, reallocating silicon and assembly capacity to devices that embed dedicated neural‑processing units for on‑device vision tasks (Mix Vale, Feb 22). Engineers are reportedly integrating a new “liquid‑glass” sensor array into the upcoming iPhone 17 Air, which Apple unveiled as an ultra‑thin handset built around a custom visual‑AI processor that can run real‑time object detection, scene segmentation, and augmented‑reality overlays without cloud latency (Mix Vale, Feb 22).

The visual‑AI platform is being repurposed across Apple’s broader product line. Gurman’s reporting for iClarified notes that the same processor architecture will power the next generation of Apple’s wearables, including an AR‑focused headset slated for a spring launch and a pair of AI‑enhanced glasses that will compete directly with Meta’s Ray‑Ban Gen 2 (iClarified, Feb 22). By consolidating AI silicon into a single “visual intelligence” family, Apple hopes to achieve economies of scale that were previously spread across disparate SoC designs for phones, tablets, and Macs. Bloomberg’s analysis suggests the move also positions Apple to monetize its AI capabilities through subscription services that rely on on‑device vision, such as advanced photo editing, real‑time translation of text in the camera viewfinder, and contextual recommendations in Apple Maps.

Apple’s decision arrives amid a broader industry pivot toward on‑device AI. The iPhone 15 Pro already supports Apple’s visual‑intelligence APIs, allowing third‑party apps to tap into the camera’s neural engine for tasks like live object recognition (CNET, Feb 2026). However, the new hardware will push those capabilities from developer‑accessible SDKs to native system services, reducing reliance on cloud inference and improving privacy—a point Cook emphasized in the Bloomberg interview. The company’s recent settlement with Qualcomm, reported by CNET, clears the way for Apple to integrate more advanced RF components that support high‑bandwidth data streams needed for real‑time visual processing in wearables (CNET, Feb 2026).

Analysts see the production pause as a signal that Apple is willing to sacrifice short‑term revenue from legacy iPhone models to accelerate its AI ambitions. The iPhone 14 and SE lines accounted for roughly 15 % of Apple’s quarterly shipments in Q4 2025, according to internal estimates cited by Mix Vale. By redirecting those fab slots to AI‑centric devices, Apple can bring the visual‑intelligence processor to market faster, potentially narrowing the gap with rivals like Google’s Tensor‑based Pixel 8 series and Samsung’s Exynos Vision chips. Bloomberg notes that Apple’s visual‑AI push could also dovetail with its upcoming low‑end MacBook launch, which is expected to feature the same neural engine to enable on‑device video analysis for professional workflows (Bloomberg, Feb 22).

If Apple’s gamble pays off, the visual‑intelligence ecosystem could become a new revenue pillar, complementing services such as iCloud and Apple TV+. The company’s history of bundling hardware advances with software ecosystems suggests it will monetize the AI stack through tiered subscriptions for developers and consumers alike. Yet the transition carries risk: halting three popular iPhone lines may alienate price‑sensitive buyers and give competitors a foothold in the mid‑range market. Only time will tell whether Apple’s visual‑AI focus can sustain its premium brand while delivering the differentiated experiences that have historically justified its pricing premium.