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Apple’s (AAPL) latest lineup of iPhones could be its most successful smartphone launch to date, driving an upgrade “super cycle” that could see Apple selling upwards of 240 million iPhones next year.
That’s according to a research note Wedbush analysts, led by Dan Ives, published Monday. Ives believes the launch of this line of iPhones, the first to be built from the ground up specifically for its new artificial intelligence initiative, Apple Intelligence, will set off a consumer AI revolution.
“Apple launching AI coupled by a massive pent up upgrade cycle is creating this new era of iPhone growth including in the key China region which has been a drag on the top-line over the past year,” Ives said.
In the past year, Apple’s iPhone sales fell 19% in China, with its share of China’s smartphone market falling year-over-year in the first quarter of 2024 to 15.7% from 19.7%. The company has had to cut prices on some iPhone models in the Chinese market as competition grows with Huawei and other homegrown smartphone-makers.
Read more: Huawei’s new smartphone has more than 3 million preorders as Apple launches its new iPhone
It’s hoping swanky new tech will change that. Apple Intelligence will understand and create images and language, edit, change tone, and proofread text, and even create new emojis using a typed description, the company said Monday at its annual iPhone event.
Siri will also become more natural, relevant, and personalized, and will allow users to access ChatGPT directly from their devices. These specs could drive an upgrade “supercycle’ for the iPhone maker, with roughly 300 million iPhones globally that have not been upgraded in over 4 years.
“The new era of personalization and how consumers interact with their iPhones has now begun and we believe this will cause a renaissance of iPhone growth,” Ives said, noting a high single-digit share growth over the next 12 to 18 months that could give Apple a $4 trillion market cap in 2025. Apple currently has a $3.3 trillion market cap.
William Kerwin, equity analyst at Morningstar (MORN), similarly believes Apple Intelligence will be enticing enough for consumers to drive “good growth” in the 2025 fiscal year.
And Ives believes these features could have a domino effect, setting off a race for app developers.
“We expect developers over the next 6 to 12 months to build hundreds of generative AI-driven apps that will be key ingredients in the recipe for [Apple’s] success as its technology stack creates the core building blocks of the consumer AI tidal wave we see coming starting with iPhone 16,” Ives said.
Other specs include a customizable action button to create shortcuts and a side camera control button, which allows users to open and control the camera with their finger.