No one has explained exactly how the system works, but we can make some educated guesses. Even when an iPhone is “off” or discharged, it’s still possible for the NFC chip to work. Apple Pay and digital card keys are already set up to work with a low battery. Placing a box in the Presto oven would presumably trigger the NFC chip, wake the OS, and cause the phone to boot into an Apple-only unattended update mode (hopefully, there is a lot of security around this).
NFC’s maximum data rate of 848 kbit/s means there’s no way you could send an OS update over that connection, but that quick burst of data is good enough to wake the phone and pass it an SSID and password for a Wi-Fi connection of some kind, which pretty much has to exist in the Presto oven somewhere. With wireless charging powering the phone the whole time, it will have plenty of juice to connect to the Internet, download the update, and install it.
The idea of updating a phone in its box is a uniquely Apple proposition, as pulling it off requires end-to-end control of the device. It will take a lot of work put into the hardware, software, box design, and the unique phone oven itself, and the system will require an army of Apple-controlled retail stores that are committed to updating the devices. That’s a huge amount of work just to avoid the minor inconvenience of the initial setup download. Only Apple would think to do this.
Some software support for the Presto box is already built into iOS 17.2, so it sounds like it’s just a matter of rolling out the hardware at Apple Stores. Gurman’s report from earlier this week said the rollout would start in April for the US and finish by the summer.