Furui's report suggests a bullish outlook for Apple (AAPL.US) Apple Intelligence in the long term because Apple is the only company able to provide low-cost, personalized artificial intelligence (AI) through proprietary data.

However, the firm believes that Apple's smart phone hardware needs to be reshaped to possess true AI capabilities, with an expected timeline possibly around 2026/2027. The market's high expectations for iPhone 16 or iPhone 17 are premature, with the firm expecting flat sales growth for iPhone 16 compared to iPhone 15 in the latter half of this year, and projecting only a 2.5% increase in the overall lifecycle sales of iPhone 16.

The firm's forecast for Apple's fourth-quarter net profit in the 2024 fiscal year is lower than market expectations, downgrading its rating from "buy" to "hold" and raising the target price from $205 to $212.92.