On Tuesday, KeyBanc maintained its Sector Weight rating on Apple Inc (NASDAQ:AAPL). stock, suggesting that the recent Worldwide Developers Conference (WWDC) may not significantly impact consumer behavior.
The firm indicated that while the event showcased a range of new software features across various Apple operating systems, these updates may not be persuasive enough for the average consumer to purchase new devices.
Apple's latest software developments, introduced at WWDC, include advancements in Apple Intelligence, which is integrated into a selection of products such as the iPhone 15 Pro/Max, iPad Pro/Air with M1 chip, and recent Mac models. However, KeyBanc pointed out that the new features will initially be available only in the U.S. and in English, which could limit their immediate appeal.
The lack of "compelling features" may lead consumers to hold onto their existing devices longer, especially to save money, according to KeyBanc. The analyst firm also highlighted the need for increased wireless carrier subsidies to stimulate an upgrade cycle, noting high expectations for Apple's performance in the second half of fiscal year 2024 and into fiscal year 2025.
One significant announcement from WWDC was the expansion of Apple Vision Pro. This service is set to become available in several new countries, starting with mainland China, Hong Kong, Japan, and Singapore on June 13, followed by launches in Australia, Canada, France, Germany, and the U.K. on June 28. This rollout marks a broader international availability of Apple's services, yet KeyBanc's stance remains unchanged post-event.
In other recent news, Apple Inc. has seen a reaffirmation of its Buy rating by TD Cowen, underscored by the company's integration of "Apple Intelligence" and the potential for cloud connectivity. Concurrently, Rosenblatt Securities maintained a Neutral rating on Apple, focusing on the company's product mix and technological advancements.
Meanwhile, JPMorgan reiterated its Overweight rating, citing the potential of AI upgrades to drive a hardware upgrade cycle. BofA Securities also expressed continued confidence in Apple, maintaining its Buy rating post-Worldwide Developers Conference (WWDC).
In the realm of artificial intelligence (AI), Apple has been making significant strides, with advancements showcased at the WWDC. The company introduced a multi-tiered AI strategy, with the new AI features set to be available on the iPhone 15 Pro Max and Macs starting this fall.
These developments come amidst criticisms from Tesla (NASDAQ:TSLA)'s CEO, Elon Musk, who threatened to ban Apple devices at his companies if Apple integrates OpenAI into its operating system.
Furthermore, Apple is leveraging AI to rejuvenate iPhone sales, targeting its substantial user base of over 1 billion customers. The new software, which requires at least an iPhone 15 Pro or Pro Max, may stimulate a wave of new purchases, according to industry analysts.
However, some analysts remain skeptical about consumers rushing to purchase new iPhones for enhanced AI features. These are the recent developments in Apple's journey.
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