Investing.com -- Apple will need to be more creative to entice new consumers to its operating system, according to analysts at D.A. Davidson.
In a note to clients dated on Jan. 2, the analysts argued that while the California company has a "strong hold" on existing smartphone owners thanks to its popular iPhone device, it must get "unstuck on the innovation front" due to the development of next-generation technologies like folding handsets and augmented reality glasses by rival firms.
Some of this innovation may come from generative artificial intelligence, the analysts said, adding that Apple (NASDAQ:AAPL) could leverage an "unparalleled" trove of consumer data to churn out new applications and experiences.
Introducing fresh offerings will be particularly important in China, where Apple is facing intense domestic competition, the analysts noted.
Reports have also said that an increasing number of Chinese state-backed businesses and government agencies are telling employees not to bring iPhones to work, presenting a possible threat to Apple's presence in the country. China is a major production hub for the group, as well as a key market that accounts for around one-fifth of its total revenue.
The analysts flagged that Apple will also need to roll out more compelling products in India, where lower price points are persuading consumers to shell out more for high-end iPhones.