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Ipad Pro 2024 (Source: Apple)
In a recent announcement, Apple unveiled its first AI-focused iPad and accompanying accessories + the ultra AI-capable M4 chip. As we’ve discussed in previous newsletters, Apple derives the majority of its revenue from iPhones, accounting for over 50% of its sales. The company has a consistent strategy of charging premiums for upgrades, such as increasing memory from 8 GB to 16 GB. Historically, software updates haven’t significantly attracted waves of new or returning customers. However, the introduction of enhanced AI capabilities could potentially change this dynamic.
Looking ahead to the events of June (i.e., WWDC 2024) and September (i.e., the iPhone 16 launch), here are my predictions:
1/ Enhanced AI integration on devices. Expect to see improvements in Siri and on-device AI capabilities, facilitating more efficient handling of routine tasks. Apple has been notably active in this area, having presented at least eight papers last month.
2/ Anticipated price increase. Apple typically adjusts its pricing every three years, and we are due for this adjustment.
3/ Restricted features for older models. A continuation of Apple’s strategy to limit certain functionalities to newer models, similar to what we observed with the ‘double tap’ feature exclusive to the Apple Watch Series 9 and Ultra 9, will likely persist. Older models, despite having the necessary hardware, often miss out on these new features.
These strategies will likely boost sales and Apple’s stock value, potentially reinstating it as the most valuable company globally.
P.S. I occasionally find myself pondering the possibility of an iPhone Ultra. Could we see such a model in the next 2-3 years? Only time will tell. Ipads, Double tap, Papers, M4 chip
