Gene Munster, managing partner at Deepwater Asset Management, has indicated that Apple Inc.’s (NASDAQ:AAPL) AI strategy could trigger a three-year iPhone upgrade cycle, potentially leading to a surge in the company’s sales.
What Happened: On Friday, Munster took to X, formerly Twitter, and suggested that the most significant development at the WWDC could be the AI capabilities of certain iPhone models. “The most significant positive wild card at WWDC is related to which versions of the iPhone will be able to run AI,” he wrote.
These AI features, known as “Apple Intelligence,” will only be compatible with iPhone 15 Pro models or newer. Munster believes that this could be a strategic move by Apple to boost device sales.
He also pointed out the potential for an increase in iPhone sales due to a large customer base ready for an upgrade. “I, along with most investors, estimate 40% of iPhone users have a phone that is more than 4 years old, and ready for an upgrade. This compares to a typical cycle of 20-25%.”
Munster concluded by saying, “Don’t overthink it, the iPhone is still the primary driver of $AAPL.” He predicted that if iPhone sales return to 5% growth over the next three years, the company could exceed expectations in 2024 and 2025, acting as a catalyst for Apple shares to rise.
Why It Matters: Munster has previously also said that Apple’s AI overhaul could revolutionize the way the world interacts with artificial intelligence. This could help Apple secure its position as one of the leaders of the Magnificent Seven.
“Very similar to what Apple has done in terms of the paradigm shift from the mouse to the touch interface, the AI interface and AI embedded in the operating system is going to be a vault forward,” Munster said.
Meanwhile, earlier this week, Nvidia Corp. surpassed Apple in terms of market capitalization, becoming the second most valuable company in the world. According to tech analyst Ming-Chi Kuo, this development was based on the strong growth trend of AI and the innovation challenges faced by consumer electronics.
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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