Apple, an American technology giant, may launch a new blockbuster product after the iPhone as early as this summer, hoping to open up a new Xintiandi in generative AI.
Analysts Ben Reitzes and Nick Monroe from Melius Research, a Wall Street consulting firm, believe that investors should pay attention to what Apple will announce at the annual World Developers Conference (WWDC) this summer.
Apple is now facing many challenges. Last quarter, Apple's sales only increased by 2%, while last year's revenue for the whole year decreased by 2.8% year-on-year; And Apple also faces considerable pressure in the Chinese market. According to research firm Counterpoint, in the first six weeks of 2024, Apple's best-selling product, the iPhone, saw a 24% year-on-year decrease in sales in China.
Therefore, Apple urgently needs a heavyweight product to boost its sales.
Heavyweight products after iPhone
As always, Apple did not publicly discuss the products it was developing before preparing to announce its upcoming release.
However, at Apple's annual general meeting, CEO Tim Cook promised investors that the company would "open up a new world" in generative AI this year.
Cook said, "We will continue to invest a lot of time and effort in artificial intelligence, and I believe that generative AI is a huge opportunity for Apple."
Last month, Apple officially announced the cessation of electric vehicle development and focused more energy on ongoing generative artificial intelligence projects. In addition, according to previous media reports, the company spends over $1 billion annually on generative artificial intelligence.
Reitzes and Monroe wrote in a report to investors, "For us, this (generative artificial intelligence project) will be the most important product release after the iPhone." They see the new artificial intelligence features as catalysts for the new iPhone super cycle next year.
Apple, as usual, focuses on the combination of hardware (chips) and software (large language models and applications). The powerful chips on Apple devices may not provide power for large language models, but they may be exactly what devices or "edge" AI applications need. That is to say, these powerful chips will open the door to more applications and use cases, while securely storing data on devices.
In addition, Apple has multiple ways to monetize its advancement in artificial intelligence.
This report mentions that advances in artificial intelligence may prompt more users to upgrade their iPhones. Apple currently has over 2.2 billion active devices, and as long as the artificial intelligence features are impressive enough, it can persuade users to upgrade their iPhones and thereby increase iPhone sales.