The market is optimistically anticipating that the Apple Intelligence launched by apple this fall could trigger a massive upgrade super cycle by the end of the year, significantly driving up iPhone shipments; however, more and more evidence suggests that Wall Street's high expectations may not materialize.

On Wednesday, market tracking institutions IDC released a new study predicting that smart phone shipments will grow by 6.2% in 2024, with total shipments reaching 1.24 billion units. This means that the global smart phone market will experience a strong rebound in 2024, ending two consecutive years of declining sales.

However, it is worth noting that apple's growth is relatively small, with iPhone shipments likely increasing by only 0.4%, due to apple's competitors—many android phone manufacturers—rapidly eroding apple's market share, particularly in china and emerging markets, as their phones are more affordably priced.

Specifically, the average selling price of android competitors is about $295, while apple's average selling price exceeds $1000, though apple remains the most profitable company. Additionally, long-term significant discounts offered by five or six phone manufacturers in china have stimulated sales, and these discounts have proven more effective than last year.

Earlier, at the end of August this year, Wedbush analyst Dan Ives released a report indicating that the iPhone 16 equipped with ai technology would trigger the largest upgrade super cycle in history. He wrote, "Recent research in asia has made us more confident that this upgrade cycle will bring apple a long-awaited growth revival."

However, a closer examination of the report reveals that despite the emergence of ai technology, the smart phone market remains sluggish in the post-pandemic era, and the recovery of the smart phone market is not balanced. IDC pointed out that the main drivers of growth in 2024 come from pent-up demand and low smart phone penetration rates in certain areas. More affordable devices launched by android manufacturers have helped chinese brands seize this opportunity. Although companies such as Samsung Electronics, apple, and Google are aggressively promoting ai-enhanced features, these have not sparked consumer interest.

IDC's research director Nabila Popal stated:

Despite generative ai still being a hot topic and top priority for many manufacturers, it has yet to significantly impact demand or drive early device upgrades. More investment is needed to raise consumer awareness and to introduce a 'must-have' feature that would prompt consumers to flock to stores, thereby creating the super cycle that everyone is looking forward to.

It is noteworthy that globally, smart phone shipments have not yet returned to pre-pandemic levels. IDC predicts limited shipment growth in the coming years, only low single-digit growth. The prolonged upgrade cycle, saturation of developed markets, and the rapid growth of second-hand smart phone trades are seen as the main factors leading to market stagnation.

On Wednesday, apple's stock price fell over 0.5%, but it has risen more than 22% so far this year, reaching a historic high. On Wall Street, goldman sachs analysts still rated apple as a 'buy', with a 12-month target price of $286.

Editor/Lambor