Apple Inc. may be poised for one of the most significant upgrade cycles since 2015, as highlighted by EMJ Capital's president, Eric Jackson. He predicts that the next year could see substantial sales growth fueled by the anticipated launch of the iPhone 17. Jackson believes that while consumers may not rush to embrace the new Apple Intelligence features in the latest iPhones, these innovations will gradually attract users over time.

The Anticipation of iPhone 17

The upcoming iPhone 17 is expected to introduce more developed AI features, setting the stage for a potential game-changer in Apple's product lineup. As user understanding of these capabilities grows, there could be a significant sales boost by the fall of 2025. Observers are keenly watching how Apple’s developments unfold and whether they will lead to the predicted upgrade cycle. Jackson expressed, “I do believe that we are going to see the mother of all upgrade cycles, probably the biggest upgrade cycle for Apple since about 2015.”

This anticipated cycle is critical as it could lead to an increase in market share and customer loyalty, especially if Apple successfully integrates AI into its products, making them more attractive to users. However, Jackson cautions that this upgrade process will occur gradually over the next year, not just during the typical September-October launch period.

Analyst Perspectives: Caution vs. Optimism

While Jackson's views are optimistic, other analysts have expressed more cautious perspectives. Edison Lee, a Jefferies analyst, has recently expressed skepticism about the high expectations for 5% to 10% growth in iPhone sales. He argues that the current models have limited new features and AI capabilities, which might not entice consumers to upgrade significantly.

Lee downgraded his rating on Apple stock from buy to hold, citing concerns about the company’s high valuation. He notes that smartphone hardware needs substantial upgrades before it can fully support advanced AI features. According to Lee, these improvements may not happen until around 2026 or 2027, indicating a longer wait for significant advancements that could drive sales.

Doubts Over a "Super Cycle"

Bloomberg’s Mark Gurman also casts doubt on the likelihood of a "super cycle" occurring this year. His reasoning is that the iPhone 16 will not fully utilize the new Apple Intelligence features until at least October. This delay may hinder any immediate sales boost that could come from consumer interest in the new functionalities.

Historically, only two iPhone models have previously driven significant sales surges: the iPhone 6 in 2016, which featured a larger display, and the iPhone 12/13 in 2021, whose success was further propelled by a strategic product portfolio and heightened post-pandemic demand. The iPhone 6 introduced a larger screen that attracted many users, while the iPhone 12/13 benefitted from a strong market response to 5G capabilities and a renewed interest in Apple products during a time of increased remote work and digital connectivity.

The Future: Watching for Developments

As Apple moves forward, it remains to be seen how these emerging trends and features will impact the smartphone market. With the potential for an upgrade cycle on the horizon, consumers, analysts, and investors will be watching closely to see if Apple can replicate past successes with its next generation of devices.

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