Apple Increases iPhone Orders by 10%, Anticipating AI Upgrade Supercycle
In the tech industry, there is a growing recognition of the vast potential of artificial intelligence (AI). As a result, tech giants are incorporating AI features into their devices. This shift towards AI-enhanced hardware could trigger an unusually large smartphone upgrade cycle this fall, particularly in light of Apple's forthcoming event. The company is expected to introduce the latest AI-equipped iPhone model at this event.
Apple is gearing up for a surge in iPhone orders. According to a Nikkei report, the world's most valuable company has ordered components and parts for between 88 million and 90 million iPhones. This is a significant increase from initial orders of around 80 million.
One supplier has suggested that iPhone orders could surpass 90 million. However, it was noted that Apple typically places larger orders and adjusts production as iPhones go on sale.
An executive at one of Apple's suppliers expressed caution regarding the company's robust orders, citing stiff competition from the Chinese market due to geopolitical factors.
Goldman's Lauren Rowe highlighted to clients that tech stocks initially lagged but later reversed, with Hong Kong leading the region. This was partly due to the news of a 10% increase in iPhone orders compared to the previous year.
Apple's major event is slated for September 9. The company is expected to unveil new products including the iPhone 16, Apple Watch Series 10, Apple Watch Ultra 3, and Apple AirPods 4. It is likely that Apple executives will provide more details on the AI platform, Apple Intelligence.
Wedbush analyst Dan Ives predicts that the AI-enabled iPhone 16 will trigger Apple's largest upgrade cycle ever.
Ives stated that the next phase of the consumer AI revolution will see developers and other tech companies integrating their AI models and technology into Apple Intelligence.
He anticipates that developers will create hundreds of generative AI-driven apps over the next 6 to 12 months. These apps will be crucial to Apple's success as its technology stack forms the foundation of the impending consumer AI tidal wave, starting with the iPhone 16.
Goldman's Kash Rangan recently noted that Apple AI will boost iPhone demand. He highlighted the features of Apple Intelligence, a personal intelligence system announced at WWDC in June 2024. These features include improved Siri capabilities, language features, and image features.
Apple's stock has increased by nearly 18% this year, reaching $226 per share. This gives the company a market capitalization of approximately $3.4 trillion.
The key question is whether consumers are prepared to shell out $1,000 or more for new smartphones during a time of high inflation and soaring interest rates.
Bottom Line
The anticipation of an AI upgrade supercycle is driving Apple to increase its iPhone orders. This move is a clear indication of the tech giant's confidence in the potential of AI-enhanced hardware. However, it remains to be seen whether consumers are willing to pay a premium for these new devices, particularly in the current economic climate. What are your thoughts on this development? Feel free to share this article with your friends and discuss it further. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.
Apple Increases iPhone Orders by 10%, Anticipating AI Upgrade Supercycle
In the tech industry, there is a growing recognition of the vast potential of artificial intelligence (AI). As a result, tech giants are incorporating AI features into their devices. This shift towards AI-enhanced hardware could trigger an unusually large smartphone upgrade cycle this fall, particularly in light of Apple's forthcoming event. The company is expected to introduce the latest AI-equipped iPhone model at this event.
Apple is gearing up for a surge in iPhone orders. According to a Nikkei report, the world's most valuable company has ordered components and parts for between 88 million and 90 million iPhones. This is a significant increase from initial orders of around 80 million.
One supplier has suggested that iPhone orders could surpass 90 million. However, it was noted that Apple typically places larger orders and adjusts production as iPhones go on sale.
An executive at one of Apple's suppliers expressed caution regarding the company's robust orders, citing stiff competition from the Chinese market due to geopolitical factors.
Goldman's Lauren Rowe highlighted to clients that tech stocks initially lagged but later reversed, with Hong Kong leading the region. This was partly due to the news of a 10% increase in iPhone orders compared to the previous year.
Apple's major event is slated for September 9. The company is expected to unveil new products including the iPhone 16, Apple Watch Series 10, Apple Watch Ultra 3, and Apple AirPods 4. It is likely that Apple executives will provide more details on the AI platform, Apple Intelligence.
Wedbush analyst Dan Ives predicts that the AI-enabled iPhone 16 will trigger Apple's largest upgrade cycle ever.
Ives stated that the next phase of the consumer AI revolution will see developers and other tech companies integrating their AI models and technology into Apple Intelligence.
He anticipates that developers will create hundreds of generative AI-driven apps over the next 6 to 12 months. These apps will be crucial to Apple's success as its technology stack forms the foundation of the impending consumer AI tidal wave, starting with the iPhone 16.
Goldman's Kash Rangan recently noted that Apple AI will boost iPhone demand. He highlighted the features of Apple Intelligence, a personal intelligence system announced at WWDC in June 2024. These features include improved Siri capabilities, language features, and image features.
Apple's stock has increased by nearly 18% this year, reaching $226 per share. This gives the company a market capitalization of approximately $3.4 trillion.
The key question is whether consumers are prepared to shell out $1,000 or more for new smartphones during a time of high inflation and soaring interest rates.
Bottom Line
The anticipation of an AI upgrade supercycle is driving Apple to increase its iPhone orders. This move is a clear indication of the tech giant's confidence in the potential of AI-enhanced hardware. However, it remains to be seen whether consumers are willing to pay a premium for these new devices, particularly in the current economic climate. What are your thoughts on this development? Feel free to share this article with your friends and discuss it further. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.
