7 Apple Analysts Mixed on WWDC 2024: iPhone Upgrade Cycle Is Coming, But When? -Alphabet (NASDAQ:GOOG), Apple (NASDAQ:AAPL)

Tech giant Apple Inc (NASDAQ: AAPL) launched its Worldwide Developers Conference (WWDC) on Monday, highlighting new features for iPads and iPhones and a greater push to integrate artificial intelligence into products.

Here’s what analysts are saying after the event.

Apple analysts:

• Needham analyst Laura Martin has a Buy rating and a $220 price target.
• JPMorgan analyst Samik Chatterjee has an overweight rating and a price target of $225.
• RBC Capital analyst Brad Erickson has an outperform rating and a $200 price target.
• Rosenblatt analyst Barton Crockett has a neutral rating and a $196 price target.
• Citi analyst Atif Malik has a Buy rating and a $210 price target.
• KeyBanc analyst Brandon Nispel has a sector weighting and no price target.
• Bank of America analyst Wamsi Mohan has a Buy rating and a $230 price target.

Related Link: Wedbush Analyst Dan Ives Says Apple’s WWDC 2024 Keynote Lived Up to Its Hype: ‘I Think It Was a Home Run’

Needham on Apple: The WWDC Keynote was disappointing, according to Martin.

“We heard nothing during the WWDC keynote that leads us to believe that consumers will buy iPhones faster than our current projections,” Martin said.

The analyst said GenAI was the best hope for the Apple event, “but it fizzled.” Martin also questioned why Apple waited to talk about GenAI until after the event, “which made them appear deaf to Wall Street’s concerns.”

“Annual product launches are too slow a pace in a GenAI world.”

Martin said the biggest surprise of the event was the fact that Apple would outsource part of the consumer offering to OpenAI.

“This is the first time Apple has outsourced key technology to a third party.”

JPMorgan on Apple: The WWDC keynote showed “enough improvement” for iPhone upgrades, Chatterjee said in a new note to investors.

“While stocks may take a breather today after recent outperformance at the event due to the lack of any ‘killer apps,’ our experience in consumer surveys with previous generations of iPhone launches tells us that the hardware upgrade cycle is driven more by a set of feature upgrades in various applications,” Chatterjee said.

The analyst said the release of AI features for Mac, iPad and iPhone supports an upgrade cycle across all devices.

“We continue to expect the start of a device upgrade cycle for iPhones later this fall, with the upgrade cycle likely culminating with the launch of the iPhone 17 in 2025.”

RBC on Apple: WWDC main announcements could be negative for Alphabet Inc. (NASDAQ: GOOG) (NASDAQ: GOOGL), Erickson said.

“Apple has confirmed that OpenAI’s ChatGPT will be Apple’s first GenAI partner with ChatGPT integrated with Siri as well as some of Apple’s other productivity apps around content creation,” Erickson said.

The analyst said that while Google’s Gemini might be added in the future, its “gap with Apple’s user base” might have narrowed. Erickson said Apple could diversify away from Alphabet.

Rosenblatt on Apple: The WWDC keynote focused on upgrading more than 900 million iPhones, Crockett said.

“Apple sells more than 200 million iPhones a year and has an iPhone installed base of more than a billion devices. But only about 10% of the installed base is made up of high-end iPhone models. iPhone 15 Pro and Pro Max that use Apple’s A17 Pro chip,” Crockett said.

The analyst said Apple Intelligence would significantly improve Siri functionality on the iPhone.

“It (Siri) will go beyond simple question/answer, to an ability to understand imperfectly worded queries, and will work with both voice and text input, and will be a way to integrate the capabilities of ‘AI in your iPhone apps.’

Citi on Apple: WWDC 2024 was the best ever, according to Malik, with increased confidence in the iPhone refresh for 2024 after the event.

“We think Apple’s WWDC was the best WWDC conference in a long time because it introduced AI to the rest of the people,” Malik said.

The analyst said the AI ​​features will be available on the iPhone 15 Pro Max/Mac in the fall, with the iPhone 16 and iPhone 17 models coming in the future.

“With iPhone demand stabilizing, we maintain our Buy rating following the WWDC event.”

KeyBanc on Apple: WWDC 2024 was an “information sales event,” Nispel said in a new note to investors.

“We believe WWDC is a news-selling event where the bulls’ view, centered on an ‘iPhone super cycle’ triggered by the integration of Apple intelligence (AI) into products, will likely be seen as disappointing,” Nispel said.

The analyst said new software features for iOS, iPad, OS, macOS and visionOS are useful but might not entice the average consumer to buy a new Apple device.

“We believe consumers will hold on to their devices longer to save money given the lack of exciting features.”

Bank of America on Apple: The announcement of Apple Intelligence and a partnership with OpenAI were key to Mohan’s WWDC keynote.

“The feature set is available on relatively new devices, which we believe may lead to an upgrade cycle for AI-enabled IntelliPhones as consumers look to increase their productivity with new supported features,” Mohan said.

The analyst said the OpenAI partnership still has questions about the monetization model.

“We expect Apple to be paid to provide access to its large installed base.”

AAPL Price Action: Apple shares rose 5% to $202.93 on Tuesday, hitting new 52-week highs.

Read Next: As Elon Musk Slams Apple’s ChatGPT-Parent OpenAI Partnership, Analysts Say There’s Definitely ‘An Unanswered Question’

Photo courtesy of Apple