Company Interview / New iPhone a market fizzer, but plenty more bites of the Apple to come

Key points:

Apple’s iPhone 16 launch features new AI tool, Glow TimeCompetition and retention in the Apple ecosystemPotential supercycle and growth boost for Apple

Hatem Dhiab from Gerber Kawasaki discusses Apple’s (NASDAQ: AAPL) recent launch of the iPhone 16, noting its new AI features such as Glow Time. He mentions that while the launch didn't significantly impact Apple’s share price, it's a better product with improvements in speed, memory, and energy efficiency.

Hatem highlights the competition Apple (NASDAQ: AAPL) faces from Huawei and Google, pointing out that Apple (NASDAQ: AAPL) is often seen as late to adopt new features but maintains a high retention rate due to its reliable and methodical approach. He emphasises Apple's focus on integrating valuable health features into its devices, aiming to become essential medical tools.

Looking ahead, Hatem discusses the potential for a supercycle with increased iPhone upgrades due to new AI capabilities. He suggests these features could help Apple (NASDAQ: AAPL) achieve higher growth rates, potentially boosting the stock by up to 10% next year.

Full unedited transcript below:

0:00

Getting back to one of the top stories, we had Apple launching its new iPhone 16, and this was really a theme around Glow Time, the artificial intelligence range. It has the ability to generate and edit text to fit certain tones. Let's get his take. Hatem Diab from Gerber Kawasaki joins me now. Hatem I remember when I was a junior reporter, these were so exciting, these big launches, they're kind of a bit of a fizz now. We didn't actually even see much movement in the Apple share price.

0:30

Hey, Juliette, how are you? Uh, yeah, I think everyone there's nothing new. Uh, I think the the excitement happened during WWDC, which is when Apple announced all the AI features. Uh, what we've seen today is typical of Apple, right? Like, it's a, uh, better product. Faster, uh, more memory, you know, more more, more, more energy efficiency and so forth. So I think really to be excited about, I think you have to look out over the next, you know, year to year what this Apple intelligence going to do for your iPhone. And it also is coming at a time when you've got the likes of Huawei and Google coming through with their phones that are going to have AI features as well. How much is Apple, I guess under pressure from consumer competition now and some of the cheaper phones as well.

1:23

Um, you know, it's they are definitely perceived to be late to the game, but Apple is always late to the game. They're very methodical about the way that they roll out things. Uh, the thing about Apple is they're very, you know, whenever you are in the ecosystem and the Apple ecosystem is just sticky, you don't leave this 95% retention rate. So I think what happens is Apple wants to make sure that whatever they roll out, it's perfectly working. It's provides a lot of value to their customers because they know that customer is very valuable in terms of, I guess, some of the other products. What did we see? I think there's something like the thinnest watch as well that they've released.

2:05

Yeah, I mean the watch is, you know, they have, you know, multiple watches that they've actually released. But I think we emphasize that is really on the health features. Uh, Apple really wants to become not just a device that you use for, for, for, for daily activities, but also a medical device, you know, something that really kind of tells you what's going on with you, with your health, with, with what's wrong with you. And maybe, uh, really alerts you if there is anything wrong. Uh, and I think that in the long term, as you know, as people, uh, are more interested in their health and become older, you know, all these devices just become very, very useful and essential. Really.

2:47

Um, Hatem as well, I guess. What does this mean more broadly from for Apple when you look at analyst expectations? Because as I mentioned, we didn't see too much of an impact on the market overnight

2:58

Yeah, I think that's that's the big question. Right. Everyone has been talking about the super cycle. Is this going to be a cycle where, you know, most people upgrade their iPhones? Uh, there is currently about 1.2 billion iPhones around the world. Um, and usually Apple has about 200 million to 220 million a year. New iPhones. Can they sell more this year so they can continue to grow? Uh, and I think with the Apple intelligence, they can finally live up to, uh, their promise. Right? Can Apple can can my iPhone actually accomplish tasks for me? Can it book a restaurant reservation? Can it, uh uh, book a car for me to go to the airport, whatever task they need to, uh, that will be very, very useful. And that will really make sure that people upgrade their iPhones. So I think that's really the big promise. And what that means is right now, the street has grown at 5% next year. I think with the supercycle hopping Apple can grow 8 to 10%, which would be fantastic for the

3:58

stock.