Apple's iPhone 16 to Kickstart AI-Driven Upgrade Cycle
- BofA Securities maintains buy rating for Apple
- Potential price increases could boost stock performance
- Historically, Apple's stock climbs 2.2% post-announcement
Apple is preparing to unveil the iPhone 16 lineup at its 'Glowtime' event. This launch is predicted to kickstart a multiyear upgrade cycle, driven by the demand for the latest hardware to support generative artificial intelligence features. The company plans to launch four iPhone 16 models and introduce Apple Intelligence initially in the US, with plans to expand to other regions. The Pro and Pro Max models are expected to see updates in screen size and design.
In addition to the iPhone 16, the annual launch event is also set to reveal new AirPods and an updated Apple Watch. The integration of generative AI into Apple's ecosystem of devices could potentially trigger a super upgrade cycle. It is estimated that there are 300 million iPhones globally that have not been upgraded in over four years. This AI-driven upgrade cycle could significantly boost iPhone sales in FY25.
BofA Securities has maintained a buy rating for Apple and set a $256 price objective. The firm believes that a compelling demonstration of Apple Intelligence or third-party integrations, as well as any potential price increases, could have a positive impact on the stock's performance. Historically, Apple's stock has seen an average climb of 2.2% from the announcement date to the release day.