iPhone sales can increase after Apple WWDC 2024

The focus wasn't solely on pushing more iPhones.

In the face of fluctuating consumer spending and intensified competition in the tech arena, Apple turned to AI to reinvigorate its expansive fan base of over 1 billion customers and counteract a sales downturn for its flagship product.

The software, compatible with at least the iPhone 15 Pro or Pro Max models, is poised to spark a wave of fresh purchases, according to several analysts. Some anticipate the most significant upgrade surge since the debut of the iPhone 12 in 2020, which enticed buyers partly with its 5G capabilities.

Analyst Gil Luria of D.A. Davidson remarked, "What we saw today was more compelling than anything we’ve seen since." Tejas Dessai of Global X concurred, stating, "Investors clearly want a more comprehensive and ambitious strategy from Apple when it comes to AI." However, the company's stock dipped 2% following the announcement.

AI Advancements

Despite their appeal, Apple's AI features won't extend to every iPhone.

The company clarified that smartphone users must upgrade to the iPhone 15 Pro or Pro Max, introduced in September 2023, to access the AI capabilities, which rely on the chips in Apple's newer devices.

For Wedbush Securities analyst Dan Ives, this represents a significant opportunity, estimating that approximately 270 million iPhones remain unchanged after four years. "We estimate 15%+ of the Apple installed base will upgrade to iPhone 16 as Apple Intelligence is the killer app many have been waiting for," Ives projected.

The release of the iPhone 16 is anticipated sometime this autumn.

Gene Munster, a managing partner at Deepwater Asset Management, highlighted another advantage for Apple: seamless integration with ChatGPT. "They’re really taking the friction out of using AI," Munster noted.

Apple's iPhone revenue for the fiscal year ending in September 2023 totaled $200.6 billion, a slight decline from $205.5 billion the previous year, as per the company's latest annual report.

However, AI is just one aspect of Apple's appeal to consumers. While customers may primarily seek larger displays or improved cameras, the AI updates are likely to attract early adopters, particularly for their capacity to execute actions within and across apps, observed Martin Yang of Oppenheimer & Co. "That action part will make Apple an immediate leader in consumer AI," Yang affirmed.