By Adam Clark
Apple's much-heralded rollout of artificial-intelligence capabilities for the iPhone looks to still be underwhelming buyers. While the company's AI plans could shift the mood, it will likely take a while.
Apple Intelligence -- the company's brand of AI -- was officially released to the U.S. public on the most recent iPhone models late last month. Although the stock took off in anticipation of the company finally joining the AI race, the shares have flatlined since.
The reason is that there isn't much evidence that the technology is prompting more iPhone buying. Ahead of the holiday season, the wait times for a new purchaser to receive their smartphone look the same as last year, according to data from UBS this week.
"Even as consumers familiarize themselves with Apple Intelligence...the data indicates that demand has been relatively muted thus far," analyst David Vogt wrote in a research note.
The UBS analyst has a Neutral rating and a $236 target price on Apple stock. Apple shares were up 0.2% at $228.87 in early trading on Friday.
Is it time to panic for stockholders? Probably not.
Apple has always been clear that its AI rollout will be phased in over time. It won't be available in the European Union until April next year and there is currently no schedule at all for China. And Apple is planning several AI updates, including one this December that will bring writing tools, create-your-own-emoji, and visual intelligence capacities to Apple Intelligence.
Consumers might have to wait until 2026 for a full AI-enabled refresh of Apple's Siri digital assistant, with a focus on its conversational abilities, according to Bloomberg which cited people familiar with the matter in a Thursday report. Apple didn't immediately respond to a request for comment on the report.
That means investors will likely need to be patient. Citi analyst Atif Malik expects a 2% fall in iPhone unit shipments this year but then 8% growth in 2025 from that level, including a boost from the expected launch of the iPhone 17. He kept a Buy rating and $255 price target on Apple stock in a research note on Friday.
Write to Adam Clark at adam.clark@barrons.com
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(END) Dow Jones Newswires
November 22, 2024 10:09 ET (15:09 GMT)
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