Investment firm Piper Sandler believes Apple Intelligence will not boost iPhone 16 sales at first, and an expected price hike may impact demand.
Renders of a possible designs for the iPhone 16 range
In July 2024, Piper Sandler raised its Apple target price to $225 specifically because of Apple Intelligence. Ahead of the iPhone 16 launch, the company still believes that Apple Intelligence will be key -- but not immediately.
That's because the features of Apple Intelligence will launch later in the year, rather than coming out alongside the iPhone 16 range. Then, too, the company says that it wants to see Apple do more to market the benefits of Apple Intelligence, given "the lack of a killer consumer AI app" to date.
Piper Sandler is not expecting "any revolutionary hardware innovations," but also wonders whether Apple can continue to keep its existing iPhone pricing. It's possible, say the analysts, that Apple will have to charge more because of the costs of Apple Intelligence.
That plays into how the analysts also believe that consumer discretionary spending "is cracking." Any iPhone price increase, then, could be problematic.
But then Piper Sandler says that "the potential for an SE version Apple Watch and a lower priced AirPods alternative could prove to be valuable in the current economic backdrop."
Given all this, Piper Sandler argues that the value of Apple Intelligence is already represented in its existing price target of $225, so it is not changing that.
Apple will announce its iPhone 16 range -- plus Apple Watch and potentially new AirPods -- in its "It's Glowtime" event on September 9, 2024.