AI may bring warmth to the mobile phone market.
Market research firm IDC has raised its global smartphone shipment forecast in its latest report, predicting that global shipments will reach 1.23 billion units by 2024, a year-on-year increase of 5.8%. Previously, IDC predicted a growth rate of 4% and a shipment volume of 1.21 billion units, respectively.
The key reason for raising expectations is AI. IDC states that as consumer electronics demand recovers, generative artificial intelligence (GenAI) will attract more buyers. It is expected that as more and more mobile phone brands adopt built-in GenAI functionality in their flagship products, by the end of 2024, GenAI smartphones will surge 344% and occupy 18% of the market share.
Undoubtedly, among all AI smartphones, the most highly anticipated and anticipated one is Apple's upcoming first AI smartphone, the iPhone 16.
According to media reports today, Apple believes that the iPhone 16 will be a great success, with an initial order quantity of approximately 88 million to 90 million iPhones from component suppliers, at least 10% higher than last year's initial order of 80 million iPhones.
Some component manufacturers say they have even received orders for over 90 million units, but they add that iPhone manufacturers typically place more orders initially and then adjust the order quantity after the product is actually launched. Multiple sources have stated that overall, Apple suppliers are cautious and expect iPhone shipments to remain relatively flat throughout the year, as the comparison base for 2023 is higher.
Wedbush believes that the iPhone 16 will initiate the largest upgrade cycle in Apple's history, and recent research on the Asian supply chain has given analysts more confidence in the demand for Apple's new generation of smartphones. Apple will usher in a long-awaited growth revival in the coming year. It stated that approximately 300 million iPhones worldwide have not been upgraded in over four years, laying the foundation for a significant surge in demand. With the formation of an AI driven upgrade cycle, Apple's iPhone sales in the 2025 fiscal year may exceed 240 million units. China remains the key to Apple's growth
AI smartphones are expected to drive a trend of hardware upgrades
Among Apple's released iPhones, only the 15 Pro/Pro Max can be equipped with Apple Intelligence, and these two models are currently the only two 8GB memory models in the iPhone. Renowned analyst Guo Mingchi previously predicted that the iPhone 16 series would continue to have 8GB of memory, which would also limit Apple's development of large end models.
The iPhone 16 series has not yet been released, and today Guo Mingchi revealed the iPhone 17 series again. He stated that in the 2025 iPhone 17 series, only the Pro Max model will have 12GB of DRAM and an upgraded heat dissipation system that combines evaporative chamber (VC) technology and graphite sheets; Other models in the same series use 8GB DRAM and separate graphite sheets for heat management. Enhanced device AI capabilities may become the main selling point of the iPhone 17 Pro Max.
The development trend of AI smartphones is expected to drive hardware upgrades. This week's research report from Xingye Securities pointed out that from the perspective of AI mobile phone basic hardware, in order to meet the experience requirements of large model operation, the demand or value of components such as SoC, memory, and heat dissipation will all increase.
Analysts further pointed out that from the perspective of the entire machine, with the improvement of terminal chip computing power and AI experience, the power of AI mobile phone replacement will be strengthened, and the electronics industry chain will benefit from the total number of machines; Secondly, in the initial stage, AI models will mainly be installed in high-end models, and high-end product lines will benefit first. Apple has a relatively high market share in the high-end market, and the trend of machine replacement is more obvious. We can pay attention to opportunities in the whole machine, ODM manufacturers, and "fruit chain" related businesses. From the perspective of the industry chain, processors and memory are the most obvious beneficiaries, followed by complementary incremental devices such as heat dissipation. We can focus on business opportunities in storage expansion, processor localization, and incremental devices such as heat dissipation and microphones.