Apple Inc. is set to significantly exceed Wall Street's earlier predictions regarding its iPhone 16 shipments, with a notable increase in customers anticipated to upgrade due to the innovative artificial intelligence capabilities integrated into the device, as reported by Wedbush Securities. The financial analysis suggests that initial shipments could be well over 90 million units, enhancing the originally estimated forecast of 80 to 84 million units.
This surge in potential upgrades is underscored by the fact that approximately 300 million iPhones globally have not been updated in more than four years. The analysts at Wedbush, led by Daniel Ives, have highlighted a growing anticipation within the tech industry for Apple's upcoming AI-driven launch of the iPhone 16, expected this September.
Recent checks in Asia have reinforced their confidence that this upgrade cycle could trigger a long-awaited resurgence in growth for Apple in Cupertino over the coming year. Maintaining a favorable outlook, Wedbush has sustained its outperform rating on Apple’s stocks, reiterating a 12-month price target set at $285. China is identified as a crucial element in Apple's growth strategy, projected to witness improving gains commencing with the iPhone 16 as the company steps into fiscal 2025.
The analysis posits that Apple may sell over 240 million iPhone units in the upcoming fiscal year fueled by this AI-driven upgrade cycle. Furthermore, the brokerage expects a wave of developers to create 'hundreds' of generative AI-driven applications within the next 6 to 12 months, as the technological competition heats up. Competitors like Meta Platforms and Alphabet's Google will likely need to adapt their models and technology to integrate within Apple’s AI platform, according to Wedbush's findings.
This alignment might lead to approximately $10 billion in incremental high-margin service growth annually for Apple, as the introduction of AI technology within Apple's ecosystem creates new monetization opportunities across both services and hardware. Analysts estimate that this innovation could add between $30 and $40 per share to Apple’s value. In its recently announced fiscal third-quarter results, Apple exceeded expectations, driven by a surge in iPad and Mac sales.
Although iPhone revenue experienced a year-on-year decline, the active installed base of devices continues to reach unprecedented highs across all geographic segments, revealed Chief Financial Officer Luca Maestri during a recent conference call. Key financial metrics for Apple include a current price of $216.87, reflecting a change of +0.88, equivalent to a +0.41% increase in share value.
As the tech landscape evolves, Apple appears poised to capitalize on the convergence of AI technology and consumer electronics..