Apple's Adoption Of AI For iPhones Will Drive 'Multi-Year Upgrade Cycle,' Say Analysts Ahead Of WWDC: BofA Sets $230 Target For Its 'Top Pick'

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Analysts are predicting a significant shift in the smartphone industry with the introduction of AI-powered "IntelliPhones," and are reiterating Apple Inc. AAPL as a "top pick."

What Happened: Analysts at Bank of America are expecting the advent of AI smartphones, or "IntelliPhones," to trigger a major upgrade cycle, akin to the introduction of smartphones.

These devices are predicted to dominate edge AI, outperforming AI PCs due to their portability, features, and cost.

"We expect the adoption curve of AI phones to be faster than the adoption of smartphones. With an installed base of over 4 billion smartphones, we see the opportunity for the next upgrade cycle to be once in a decade type of event," the analysts at Bank of America Securities said in a note seen by Benzinga.

See Also: Apple’s WWDC Keynote Schedule Is Out As Tim Cook-Led Company Looks To Unveil Its AI Strategy: Here’s What You Need To Know

While Apple is not expected to reveal all the AI features at the upcoming WWDC, a pathway for "IntelliPhones" to become mainstream is expected, especially as conversational AI becomes more integrated into everyday use.

The brokerage reiterated Apple as a "top pick" with a target price of $230, pointing to an upside of over 20% from the current share price of $191.58.

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While smartphones offered clear advantages over keypad-based phones, especially when Apple unveiled the iPhone in 2007, the transition from smartphones to AI-powered "IntelliPhones" will be driven by features like "superior personal assistance, language processing, health monitoring," among other features.

See Also: Elon Musk Shares Hack To Improve Google Search Quality: ‘It’s A Real Problem!’

Why It Matters: More than half of the world’s smartphones are expected to be AI-capable by 2028, according to market analytics firm Canalys. This comes as Apple’s iPhone 16 launch nears, and the company is set to unveil its AI strategy at the upcoming WWDC.

Wedbush analyst Dan Ives thinks Apple's "iPhone AI moment" is here, driving a "supercycle" for Cupertino's upcoming September launch.

Price Action: At the time of writing, Apple's shares were up 0.84%, trading at $191.58, according to Benzinga Pro.

Check out more of Benzinga's Consumer Tech coverage by following this link.

Read Next: When Apple Plunged Into Severe Losses, Steve Jobs Used These 3 Simple Strategies To Save Cupertino From Bankruptcy

Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

Photo via Shutterstock

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