Apple's AI "handing in the paper" overlaid with upgrade cycle, iPhone sales may be boosted

According to Zhitong Finance and Economics APP, Apple (AAPL.US) kicked off the 2024 Worldwide Developers Conference (WWDC24) on Monday local time. In the keynote speech, Apple announced the next generation of operating systems for its major product lines. As expected, artificial intelligence was a major focus of this year's conference. During the nearly 105-minute keynote speech, over 40 minutes were dedicated to introducing Apple Intelligence. The highly anticipated OpenAI artificial intelligence chatbot ChatGPT is also confirmed to be integrated into multiple new generations of Apple operating systems such as iOS 18.

Facing fluctuations in consumer spending and increasingly fierce market competition, Apple sees artificial intelligence as a way to reverse the downward trend in iPhone sales. It is reported that Apple Intelligence will only support the iPhone 15 Pro and iPhone 15 Pro Max. Several analysts believe that this may encourage a large number of new users to purchase these models. Some predict that the biggest iPhone upgrade cycle since the release of the iPhone 12 in 2020 will come this fall.

Wedbush Securities analyst Dan Ives believes this is a huge opportunity. He estimates that about 270 million iPhones have been waiting to be upgraded over the past four years. He said, "We estimate that over 15% of Apple users will upgrade to the iPhone 16 because Apple Intelligence is a killer app that many people have been eagerly anticipating."

Gene Munster, managing partner at Deepwater Asset Management, stated that another advantage of Apple is the ease of integration with ChatGPT, "They have really eliminated the resistance to using artificial intelligence."

Oppenheimer analyst Martin Yang believes that artificial intelligence is just one part of what attracts consumers to Apple. Consumers may primarily want a larger display or better camera, but the updates in artificial intelligence will attract early adopters and stand out for its ability to act within and across applications, "This will make Apple a direct leader in the consumer artificial intelligence field."

However, some are skeptical and predict that consumers may not rush to buy the iPhone 15 Pro and iPhone 15 Pro Max, which support artificial intelligence. Forrester analyst Dipanjan Chatterjee said, "Perhaps the new, improved Apple Intelligence devices supporting artificial intelligence can to some extent curb the recent decline in device revenue, but not enough to create a new wave of followers." Global X analyst Tejas Dessai stated, "Investors clearly hope that Apple will adopt a more comprehensive and ambitious strategy in artificial intelligence." ”