iPhone 16 Pro is expected to benefit from an upgrade super cycle
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The new Apple Intelligence is so powerful, analysts at Wedbush are claiming that Apple has put itself at the forefront of artificial intelligence with it, and it will launch an iPhone 16 upgrader super cycle.
Wedbush has previously claimed that the introduction of AI features would so increase demand for the iPhone 16 family that it would outweigh concerns over China sales. Now in a note to investors seen by AppleInsider, Wedbush says it is bullish both on the iPhone and on Apple Intelligence.
Specifically, it argues that investors are beginning to regard Apple as the gatekeeper of the consumer AI revolution. Instead of being behind the AI industry as often reported, Apple will lead the way to an extent that it's Meta and Google that need to catch up.
Wedbush argues that this is because of how Apple Intelligence has been built to work with AI apps from other developers, such as OpenAI. The prediction is that hundreds of generative AI apps will be developed to work with Apple Intelligence in the next year.
Regarding upgrade figures, Wedbush estimates that 270 million iPhone users have not upgraded in over four years. While it does not give figures in this new note, Wedbush has previously predicted that 270 million would also be the number of iPhones that will be sold in 2024.
Wedbush bases this in part on its Asia supply chain checks, which it says shows signs of stabilization. It believes that June will prove to be the last negative growth quarter for China, and that there will be a significant turnaround with the iPhone 16 launch.
The firm's analysts predict an incremental services high margin growth for Apple of $10 billion per year. It expects that the combination of sales opportunities with both the iPhone and AI software will add $30 to $40 per share.
Wedbush is maintaining its $275 price target. That follows JP Morgan raising its Apple stock target to $245, again specifically on the Apple Intelligence announcements.