HSBC analysts report that Apple’s push to boost hardware upgrades with artificial intelligence has not yet succeeded, emphasizing that the company needs a more compelling AI experience to revitalize iPhone sales. “The iPhone still represents about half of Apple’s sales,” HSBC stated. However, “initial hopes that AI would accelerate the renewal cycle have been short-lived.”
Sam Boughedda for Investing.com:
The bank said that Apple Intelligence, unveiled in June 2024 and gradually rolling out through April 2025, has “so far failed to trigger significant improvement in user experience.” Delays in launching the AI-powered Siri may lead many users to postpone handset upgrades, HSBC warned.
That leaves Apple relying on traditional hardware upgrades to drive demand. “Better specs with iPhone 17 in September should entertain the demand, in-line with what has been seen with the iPhone 16,” HSBC said, assuming no major tariff-driven price increases.
HSBC noted Apple “cannot re-localise production fast enough to avoid U.S. tariff hikes,” estimating that consensus forecasts now assume a 20% increase in tariffs on Chinese imports.
Apple has already flagged a $900 million margin hit for the June quarter, but HSBC still expects more than $100 billion in annual free cash flow.
MacDailyNews Take: Hopefully, the iPhone 17 lineup, including the “iPhone 17 Air,” will be more than enough to keep Cook’s iteration train rolling down the tracks Steve Jobs laid for another year until the foldable iPhone and some truly meaningful Apple Intelligence / Siri updates are available.
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Come on Tim make way for those who can do the job and get it done
Perhaps someone should finally suggest the unthinkable – that for the vast majority of users, AI is a toy; a gadget. That in some industries it MAY have use, and a few more MAY have promise of one. But most iPhone users, it’s just not important. Journalists and Brokers, etc. suggest it is the future. But that (possible) future may be far away and, for that matter, non-existent. I wonder if the “certainty” about it becoming the next big thing in tech, isn’t fueled by science fiction (Star Trek, Star Wars, etc.) more than any genuine use-case for the average US citizen. Oh, it’s great for making pretty pictures and poems and even music, but really… Now certainly there are those who will really find a valuable use for it. But this may be better described as a Niche Market.
So far the biggest beneficiaries of AI are Nvidia with their hardware sales/software and major corporations that are firing off legions of expendable humans and replacing them with bots. Google is far ahead of Apple in AI but they’re in a far worse position since ChatGPT is eating their search lunch and Gemini subscriptions will never make up for lost ad revenue. Facebook is spending more than anyone but without a clear money making proposition other than the aforementioned culling of human staff. Most consumers are happy to use free chatbots but they’re not flocking to paid AI services, but soulless corporations are.
Apps, as we know them, will morph & disappear. Positioning it as iPh users/just not important, would leave the phone in the commodity & appliance realm, to inevitably be eclipsed.
If AI is considered a toy/gadget, Siri probably serves well…but investigation, learning, & discovering new things is the current front end for the common person (incl me) and it has nothing to do with a trad toy…except the resulting marvel and info wrought.
AAPL is walking a v fine line that could challenge the yrs of iPh supremacy, as well as company legacy…if they don’t soon show strong cards (real cards–not just future promises connected to future dates.