Investing.com — Wedbush analysts expect Apple (NASDAQ:) to witness a strong holiday season, driven by solid demand for iPhone 16 upgrades across its user base leading into Christmas.
The firm’s optimism is based on recent checks of Asia’s supply chain, which indicate positive trends.
A key factor is Apple Intelligence, which has yet to launch in China and other regions. Analysts suggest April is the likely timeline for the AI rollout, with a Chinese tech partner expected to be announced soon to facilitate the launch in this critical market.
The release of iOS 18.2 marked the beginning of major software updates for Apple Intelligence, introducing AI features like ChatGPT integration.
“We believe Apple is on pace to reach the $4 trillion market cap threshold by early 2025 and be the first member of this exclusive club,” analysts led by Daniel Ives said in a note.
They highlight three factors they believe bearish investors and long-time Apple skeptics have overlooked.
First, Apple’s unmatched installed base includes over 2 billion iOS devices and 1.5 billion iPhones, with around 300 million iPhones nearing the window for upgrades. Second, the Services division, valued at $2 trillion, continues to grow and increase customer monetization. Third, consumer AI adoption is expected to flow through Apple’s ecosystem, with over 20% of the global population likely to engage with AI on an Apple device in the coming years.
“We believe the success of iPhone 16 with a strong holiday season ahead over the next week will be the launching pad for a renaissance of growth in Cupertino over the next 12 to 18 months that kicks off in this December quarter,” analysts continued.
Wedbush expects Apple’s upcoming AI rollout to mark the beginning of a transformative cycle, driven by the development of AI-powered apps through Apple Intelligence. This multi-year initiative is expected to shape Apple’s future, influencing chip architecture, hardware, and iPhone models.
The release of iOS 18.2 is seen as a major step, introducing features like Genmoji, ChatGPT integration in Siri, Visual Intelligence, and an image playground. Analysts note that Apple’s AI-driven upgrade cycle could spark a record-breaking iPhone supercycle, with around 300 million iPhones globally overdue for an upgrade.
“In our view, Apple could sell north of 240 million iPhone units in FY25 as this AI-driven upgrade cycle takes hold and this will be the highest iPhone unit sales year in Apple’s history,” they wrote.
In China alone, 100 million iPhones are seen as prime for upgrades. Wedbush also expects Apple to secure a Chinese AI partner in the coming months, with AI features likely to launch in the region by April.
