iPhone 16 demand seen as ‘slightly ahead to in line’ with expectations: Wedbush

For some, Black Friday kicks off the holiday shopping season, a period of time that Apple (NASDAQ:AAPL) is heavily dependent upon. And while some investors and analysts have expressed concern about the demand of the iPhone 16, Wedbush Securities has a positive take on the latest smartphone line from the Tim Cook-led tech giant.

“We would characterize demand for iPhone 16 so far since its September launch as slightly ahead to generally in line with expectations globally,” analyst Dan Ives wrote in a note to clients.

“Importantly, Apple Intelligence has not rolled out in China or many other countries, with April the likely timetable for these AI launches along with a Chinese tech partner also named very soon to catalyze the timing of this rollout in this key region.”

Ives maintained his Outperform rating and $300 price target on Apple.

Apple Intelligence rolling out

The June announcement of Apple Intelligence, Apple’s AI feature suit, was met with much enthusiasm. But the company’s measured approach to rolling out features has caused some to wonder if Apple has fallen behind its tech brethren.

And while the release of 18.1 was well received, the release of the upcoming 18.2 may be more significant when it comes to sales, Ives posited, especially given it includes ChatGPT integration, created by generative artificial intelligence darling OpenAI.

“Our view is Apple’s AI rollout over the next few months kick-starts a new era for Cupertino as ultimately hundreds of AI driven apps get built by developers on top of the building blocks of Apple Intelligence,” Ives wrote, as he said it will be a “multi-year” journey for Apple’s AI ambitions.

In addition, Ives called iOS 18.2 a “much more important AI release,” as it not only includes ChatGPT integration with Siri, but added features such as Genmoji, Visual Intelligence, image playground, an Image Wand that transforms rough images into detailed pictures and other AI-related features.

The iOS 18.2 update is currently in beta and is expected to be released early next month.

And given that as many as 300M iPhone users (including 100M in China) have not upgraded their devices over the past four years, features like these and more could set the stage for a “supercycle” of upgrades, Ives explained.

“We believe the success of iPhone 16 with a strong holiday season ahead will be the launching pad for a renaissance [sic] of growth in Cupertino over the next 12 to 18 months,” Ives wrote.