The iPhone is referred to as a so-called super cycle when major changes in hardware and software lead to users increasingly switching to new devices. In the past, this was the case when Apple entered the 5G smartphone market, introduced the Dynamic Island and – at least in part – launched USB-C iPhones. The analysis firm Wedbush now believes that this could happen again with the iPhone 16 this fall. The reason is Apple Intelligence, the new software and hardware functions from the field of generative artificial intelligence that Apple wants to introduce.
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Apple Intelligence only with iPhone 15 Pro, 15 Pro Max and 16
This is because they are only available to a very limited extent on the iPhone. They will only run on the 15 Pro and 15 Pro Max models – plus (presumably) all iPhone 16 models. According to Apple, this is not for marketing reasons, but is purely technical. For example, only the neural engine built into the A17 Pro is said to be able to handle local large language models (LLMs) that Apple uses. In addition, there is apparently a required minimum main memory of 8 GB, which is only used from the A17 Pro onwards. Things look much better with the Mac (and the iPad), however, where even the M1 introduced in 2020 is supported by Apple Intelligence.
According to Wedbush, demand for the iPhone 16 could be so high that it could even offset Apple’s problems with iPhone sales in China. Apple is increasingly seen on Wall Street as a kind of gatekeeper for end-user AI systems. Instead of just lagging behind competitors like OpenAI, Meta or Google, the company could succeed in taking the market lead.
Barriers in language, functions and in the EU
However, these are still just investors’ dreams. Apple Intelligence cannot yet be used by users of the current developer beta of iOS 18, and Apple is apparently even planning a waiting list for developers. In addition, the AI services will only be available in US English this year, and functions such as the improved Siri will also not be complete until next year (such as full access to what is shown on the screen). Finally, Apple has decided not to introduce Apple Intelligence in the EU for the time being due to disputes over regulation.
Wedbush still sees great opportunities for Apple. The bank estimates that a total of 270 million iPhone users have not purchased a new device in the last four years. The analysts also expect the iPhone 16 to break out of negative growth in China for the first time. The services business could grow by a further 10 billion US dollars per year, and Wedbush describes the “upside” for the stock as being between 30 and 40 dollars per share. The analysts’ price target is 275 dollars. The current price is just under 209 dollars.
(bsc)