Apple recently made its foray into the world of artificial intelligence with the launch of Apple Intelligence, a suite of innovative features aimed at bringing AI directly to iPhone, iPad, and Mac users. However, there’s a catch – these advanced AI capabilities are exclusively available on the latest iPhone models, potentially prompting millions of iPhone users with older devices to consider upgrading, as suggested by analysts at Morgan Stanley.
Following Morgan Stanley’s designation of Apple as a top-pick stock, Apple’s shares soared to an all-time high, as reported by Bloomberg. Analyst Eric Woodring believes that Apple Intelligence will be a significant catalyst for iPhone upgrades, projecting sales of nearly half a billion iPhones in the next two years.
The official release of Apple Intelligence is anticipated this fall for the iPhone 15 Pro and 15 Pro Max models, with older iPhones missing out on this cutting-edge AI technology. This update will introduce AI-generated emojis, an enhanced Siri, and seamless integration with ChatGPT, while further Siri AI enhancements are expected in the coming year.
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“We believe that the upcoming iPhone 16 cycle will see a record level of pent-up demand,” Woodring stated, emphasizing the unique value that Apple Intelligence brings to the Apple ecosystem.
Previously, Morgan Stanley had forecasted around 230 million iPhone sales in the same timeframe, but the new prediction now stands at more than double that figure.
Apple holds a strategic advantage in establishing itself as the AI hub for its customers, akin to its role in digital content with the iPod and social media with the iPhone, as highlighted by Morgan Stanley analyst Ananda Baruah.
Apple CEO Tim Cook waves to customers before they enter Apple’s 5th Avenue store. (Photo by Drew Angerer/Getty Images)
Other analysts, such as Dan Ives from Wedbush Securities, have echoed similar sentiments, suggesting that a significant portion of existing iPhone users are likely to upgrade to the new iPhone model expected to launch this fall.
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Ives estimates that a substantial 270 million iPhone users have not upgraded their devices in the past four years, indicating the potential for a surge in sales with the introduction of Apple Intelligence.
During the second quarter of 2024, over half of Apple’s revenue came from iPhones, with Apple holding a significant market share in the smartphone industry in the U.S.
As of now, Apple stands as the largest company globally, boasting a market cap of $3.584 trillion, with Microsoft, Nvidia, Google, and Amazon trailing behind.
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