A recent survey by Evercore ISI indicates significant potential for a robust upgrade cycle driven by AI features in Apple's (NASDAQ:AAPL) next-generation iPhone.
According to Evercore, in a note on Friday, nearly half (46%) of users who do not currently own an iPhone 15 are likely to upgrade to the iPhone 16, driven by the added functionality of Apple Intelligence.
This interest in AI-enabled features suggests one of the more substantial upgrade cycles Apple has seen, say analysts. They state that this could translate into double-digit revenue growth on a multi-year basis.
Evercore's survey, conducted alongside their annual Services survey, suggests that if Apple Intelligence meets the initial expectations set at the Worldwide Developers Conference (WWDC), there is "sizable pent-up demand for a 'Super' cycle."
Analysts believe that with a 1.2 billion iPhone install base, this demand could comfortably surpass the street's current modeling of +4% sales growth in FY25 and 2% in FY26.
The survey also highlights the continuing strong performance of Apple's Services sector. Demand for Services, including Apple Music and TV+, is generally up, with notable share gains and acceleration likely driven by bundling.
In addition, Evercore says iCloud continues to see increases in both total users and those opting for higher-priced options, while Apple Pay now accounts for approximately 33% of credit card transactions among respondents.
"Net/net: The survey increases our confidence around a stronger for longer iPhone super cycle assuming Apple can deliver on the features," said analysts. "Services business continues to be full steam ahead and growth among newer Services show how efficiently Apple can monetize its install base."
Overall, Evercore ISI maintains an Outperform rating and a $250 price target for Apple.