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Apple’s AAPL-3.62% artificial intelligence-capable iPhone 16 lineup will set off a new rush for consumer AI, and spark a new era of growth for the tech giant, according to analysts at Wedbush.
Fans and investors alike will get their first official glimpse at the latest iPhone model at the Apple event Monday, held at the Steve Jobs Theater in the company’s California headquarters.
While this latest group of smartphones are expected to come in new colors and with bigger screens, the star of this year’s event will be the company’s foray into AI: Apple Intelligence. The phones will come loaded with iOS18, the newest operating software that will allow users to tap into the new tech.
Wedbush analysts led by Dan Ives said in a research note Sunday that this will kick off Apple’s “biggest upgrade cycle in its history,” including growth in China, where sales have lagged. According to their estimates, Apple could sell upwards of 240 million iPhones worldwide in the next fiscal year thanks to this AI-driven upgrade cycle.
“We believe the demos at the event in Apple Park will be eye opening and speaks to the broader strategic vision for consumers looking to upgrade to iPhone 16,” the analysts said. “In a nutshell, this is a historic week for Apple and we believe kicks off the next leg of the Apple growth story for [Apple chief Tim Cook] and Cupertino.”
In June, Apple finally unveiled its first AI initiative, known as Apple Intelligence — a set of AI-powered features for Safari, Notes, Calculator, and, most notably, Siri for the iOS 18, iPadOS 18, and macOS Sequoia.
The integration of AI into Apple’s popular devices will allow users to customize their home screens even more, get better answers from its voice assistant, and even access ChatGPT directly from their device, among other new features.
Given the popularity of Apple’s iPhone, Wedbush estimates that roughly 20% of consumers worldwide will access and interact with generative AI apps through Apple devices over the coming years, starting with the iPhone 16.
But to access these new features, many users are due for an upgrade. Fewer than 10% of current iPhone users would have access to Apple Intelligence with their current model, with more than 40% of Apple’s 800 million-plus smartphones being iPhone 12 or older, a Bloomberg analysis shows.
To entice buyers, Wedbush expects the iPhone 16 lineup to be at about the same price point as its iPhone 15 — which started at $799, with its Pro models starting at $999. In the analysts’ view, “Apple is not going to lose any upgrades (and the move to AI) on a price increase.”