Apple’s iPhone 16 is poised for a strong sales cycle even without AI
Apple’s Worldwide Developers Conference kicks off on Monday. The company is expected to unveil upgrades to its next mobile operating system and share its strategy for generative artificial intelligence. This focus on generative AI is essential for Apple, the only $3 trillion tech company without a publicly announced plan in this area.
Dan Gallagher for The Wall Street Journal:
The big question is whether an AI-enabled iPhone will spark a big jump in sales… Analysts expect iPhone unit sales to notch their second consecutive decline in the current fiscal year ending in September. That would be the first time that has happened in Apple’s history…
But the extended sales slump means Apple might be primed for a good iPhone cycle anyway — particularly since a large number of users are now on the iPhone 12, which came out in the fall of 2020. Apple’s first 5G iPhone proved to be a big seller, thanks in large part to heavy promotions from wireless carriers. The iPhone 12 lineup accounted for 73% of iPhone unit sales in fiscal 2021, according to Visible Alpha. Its predecessor, the iPhone 11, accounted for just 63% of iPhone sales the previous year.
A large base of users on a four-year-old device will make it much easier for Apple to sell its first AI iPhone, even if the use cases look incremental. Consumer interest in AI phones is still a bit unclear.
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MacDailyNews Take: Wedbush analyst Daniel Ives last month upped his Apple price target from $250 to $275 as he anticipates an iPhone 16 supercycle driven not only by AI technology, but also because there are 270 million iPhones currently in use that haven’t been upgraded in 4+ years.
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