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HSBC: Apple needs some real AI to sell more hardware

MacDailyNews

Jul 18

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Apple Intelligence imagery on iPhone, Mac, and iPad.

HSBC analysts report that Apple’s push to boost hardware upgrades with artificial intelligence has not yet succeeded, emphasizing that the company needs a more compelling AI experience to revitalize iPhone sales. “The iPhone still represents about half of Apple’s sales,” HSBC stated. However, “initial hopes that AI would accelerate the renewal cycle have been short-lived.”

Sam Boughedda for Investing.com:
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The bank said that Apple Intelligence, unveiled in June 2024 and gradually rolling out through April 2025, has “so far failed to trigger significant improvement in user experience.” Delays in launching the AI-powered Siri may lead many users to postpone handset upgrades, HSBC warned.
That leaves Apple relying on traditional hardware upgrades to drive demand. “Better specs with iPhone 17 in September should entertain the demand, in-line with what has been seen with the iPhone 16,” HSBC said, assuming no major tariff-driven price increases.
HSBC noted Apple “cannot re-localise production fast enough to avoid U.S. tariff hikes,” estimating that consensus forecasts now assume a 20% increase in tariffs on Chinese imports.
Apple has already flagged a $900 million margin hit for the June quarter, but HSBC still expects more than $100 billion in annual free cash flow.

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MacDailyNews Take: Hopefully, the iPhone 17 lineup, including the “iPhone 17 Air,” will be more than enough to keep Cook’s iteration train rolling down the tracks Steve Jobs laid for another year until the foldable iPhone and some truly meaningful Apple Intelligence / Siri updates are available.

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