Close on the heels of Apple, Inc.
Biggest Upgrade Cycle: The launch of the artificial intelligence technology-enabled iPhone 16 in Apple Park will set in motion Apple's biggest upgrade cycle in history, said analyst Daniel Ives. "AI is on the doorstep," he said. "Our recent Asia checks are giving us more confidence this upgrade cycle will unleash a long-awaited renaissance of growth for Cupertino over the next year," he said.
Asia supply chain checks over the past few weeks showed that this iPhone upgrade cycle could be a historical one, setting the stage for a supercycle, Ives said.
The analyst estimates initial iPhone 16 shipments to be over 90 million, ahead of the 80 million to 84 million the street is shooting for. The company can sell more than 240 million iPhones in 2025, as the AI-driven upgrade cycle takes hold, he said.
China, the analyst said, will be the "linchpin of growth," with the region expected to see improvement in growth following the iPhone 16 launch and heading into 2025.
Gatekeeper Of Consumer AI: With Apple intelligence coming to iPhones, the Street will slowly recognize that Cupertino will be the gatekeeper of the consumer AI revolution, Ives said. The next step is developers and other technology stalwarts integrating their AI models/technology into Apple Intelligence, given the company holds the keys to the 2.2 billion iOS devices worldwide and 1.5 billion iPhones, he said.
"We expect developers over the next 6 to 12 months will build hundreds of generative AI-driven apps that will be key
ingredients in the recipe for success for Apple as its technology stack creates the core building blocks of the consumer AI tidal wave we see coming starting with iPhone 16," he added.
The analyst said he sees incremental high-margin revenue in the order of $10 billion annually for Apple. The monetization opportunities on both the services as well as iPhone/hardware front could add another $30-$40 per share, propelling Apple's market cap to over $4 trillion, according to the analyst.
Maestri Passes Baton: Ives also commented on longtime CFO Luca Maestri's exit, with the veteran leaving the role on Jan. 1. He would lead the corporate service teams, including information systems/security and real estate/development and would report to CEO Tim Cook.
Kevan Parekh, an Apple finance/FP&A veteran of 11 years will take over as CFO.
Ives said he expects a very smooth transition as he takes the baton from Maestri. "Parekh is an Apple insider that has been trained for this role over the years and we expect a seamless CFO transition in Cupertino," he said.
In premarket trading on Tuesday, Apple shares fell 0.52% to $226, according to Benzinga Pro data.
