Artificial intelligence could rev up Apple’s iPhone sales

Apple — and investors — are looking to artificial intelligence to increase consumer and business interest in its offerings, particularly in iPhone, but also in Mac, iPad, Apple Watch, HomePod, Apple TV, and Vision Pro.

Ben Glickman for The Wall Street Journal:
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Analysts are increasingly optimistic that Apple’s nascent AI offerings, which would finally bring the tech giant into the competition with major rivals, will provide a much-needed boost to iPhone sales, which fell 10.5% from the prior year to $46 billion in the first quarter.

New AI offerings are expected to be unveiled at the company’s annual developers conference in June, and analysts see the offerings as a way to entice consumers to upgrade or buy new products.

“This is the drumroll moment as Apple is set to unveil its long-awaited AI strategy,” said Wedbush analysts in a research note. They expect AI to drive the next “supercycle” for iPhone sales this fall.

Ben Reitzes and Jack Adair, analysts with Melius Research, say the company’s situation is similar to where it was a decade ago, when it had lost some market share to Samsung and was releasing larger-screened iPhones. The company’s refresh cycle shortly thereafter powered huge gains for the stock and showed the power of Apple’s brand and customer loyalty, they said in a research note.

“The AI initiative that will be unveiled should bring new services and likely compel you to upgrade all your gear in order to use it over the next three years,” Reitzes and Adair said.

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