Apple Intelligence integration, iPhone pricing move into spotlight at ‘Glowtime:’ MS

Apple (NASDAQ:AAPL) will launch some of its new product models one week from Monday at the It’s Glowtime event, and analysts will be watching how the company integrates Apple Intelligence into its latest line-up.

“Apple Intelligence remains the key to unlocking pent-up iPhone demand and accelerating replacement cycle, and we expect Apple’s Sept. 9th ‘It’s Glowtime’ event to heavily feature AI integration on the new iPhone 16, though iPhone pricing and iPhone battery life will also be key details to watch for,” said Morgan Stanley analyst Erik Woodring, in an investor note.

Apple Intelligence is an AI platform that will be featured in Apple’s iOS 18, iPadOS 18 and macOS Sequoia.

“Our unique approach combines generative AI with a user’s personal context to deliver truly helpful intelligence,” said Apple CEO Tim Cook when Apple Intelligence was revealed in June. “And it can access that information in a completely private and secure way to help users do the things that matter most to them.”

The event might also feature new Apple Watches and AirPods, and possibly reveal details of how iPhone trade-in values have changed.

“Historically, the iPhone launch event has been a sell-the-news event, with Apple slightly underperforming the market the day of the iPhone launch, and then only modestly outperforming the market in the 3 months following the event,” Woodring noted.

While Morgan Stanley does not expect the market to react much differently following this year’s event, the firm does believe the iPhone 16 release could unlock pent-up demand and accelerate iPhone replacement cycles. The iPhone upgradable base is 40% larger than it was ahead of the 5G cycle.

The iPhone upgrade cycle is also at a peak of 4.8 years, which increases “the odds of positive iPhone build revisions over the next 3-12 months, which is the key factor supporting Apple as our Top Pick,” Woodring noted.

“While we still believe that Apple Intelligence feature introductions will be staggered through this Fall, the more that Apple teases the performance of Apple Intelligence on the new iPhone 16 models with 8GB of DRAM and a more powerful processor, the greater the odds of consumers associating Apple Intelligence with needing a new iPhone,” he added.