Apple’s Strong Holiday Season Prospects
Analysts at Wedbush predict a robust holiday season for Apple (NASDAQ:AAPL), fueled by substantial demand for iPhone 16 upgrades as Christmas approaches.
This optimism stems from encouraging trends observed in Asia’s supply chain. A significant aspect of this is the anticipated launch of Apple Intelligence, projected for April, with a Chinese tech partner expected to be announced soon.
The release of iOS 18.2 marks the introduction of major updates for Apple Intelligence, including AI features like ChatGPT integration.
In a recent note, analysts led by Daniel Ives expressed confidence that Apple could reach a $4 trillion market cap by early 2025, potentially being the first to achieve this milestone. They identified three critical factors that bearish investors might overlook:
- Large Installed Base: Apple has over 2 billion iOS devices and 1.5 billion iPhones, with approximately 300 million iPhones approaching upgrade eligibility.
- Growing Services Division: Valued at $2 trillion, this sector continues to grow and enhance customer monetization.
- Consumer AI Adoption: Over 20% of the global population is anticipated to engage with AI on Apple devices in the coming years.
Wedbush believes that the forthcoming holiday season will be pivotal for Apple, marking a growth phase over the next 12 to 18 months.
The analysts view the rollout of Apple’s AI as the beginning of a critical transformative cycle that will influence future hardware and iPhone models. The iOS 18.2 update introduces significant features such as Genmoji, ChatGPT in Siri, Visual Intelligence, and more.
This AI-driven cycle could lead to record-breaking iPhone sales, with projections suggesting Apple may sell over 240 million iPhones in FY25, the highest in its history. In China, there are 100 million iPhones ripe for upgrades, and Wedbush anticipates an announcement regarding a Chinese AI partner soon, with features likely to launch in April.
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