Apple Could Hit $4 Trillion Valuation With Apple Intelligence. The newly released iPhone 16 series came with only minimal differences from its predecessor the iPhone 15 series. Apple decided to focus on fixing user complaints and streamlining the experience rather than attempting radical design changes.
While this meant that there were not many exciting upgrades that got people excited, analysts say that the addition of Apple Intelligence, their cutting-edge AI platform, could be the catalyst for a massive shift in iPhone adoption and propel the company to a $4 trillion market capitalization.
Though iPhone 16 series has had relatively soft demand Apple stock has still surged 16% since November, adding nearly $500 billion to the value of the company's shares, ITHome calculates. Analysts including Morgan Stanley's Erik Woodring attribute it to soft iPhone demand since the release of the Intelligence features which have had very low availability so far. According to Woodring though those issues might be fixed and can raise the sales manifold.
China is the world's largest smartphone market and poses a special challenge to Apple. Generative AI features have been slowed in adoption by strict regulatory hurdles. The company has reportedly reached out to local tech giants Tencent and ByteDance in order to negotiate these restrictions and expand its AI capabilities in the region. Success here will be crucial as China contributes significantly to Apple's annual iPhone revenue.
While the iPhone business presents challenges Apple Services group remains a stable source of financial support. Projected to reach $100 billion in revenue by 2025. Services may account for 25% of total Apple revenue. Wedbush analysts predict that this business line will be valued between $1.5 trillion and $1.6 trillion at the end of 2024 adding to the overall market worth of Apple.
Slow In the Rollout of Apple Intelligence
The rollout of Apple Intelligence has been measured as developers face significant challenges in integrating generative AI into its ecosystem. This may further delay key iOS 19 features until 2026 that will limit the immediate impact of AI-Driven advancements. It is still unclear if this will be the catalyst that sets off an iPhone supercycle, but the potential is clear. As the functionality of generative AI becomes more available and refined, the company might see renewed enthusiasm for their devices.