Apple Gears Up for iPhone SE Launch and AI Expansion in China
Apple (AAPL) is reportedly preparing to unveil its latest iPhone SE in the coming week. Meanwhile, reports suggest the tech giant has found an AI partner in Alibaba (BABA) to facilitate the rollout of Apple Intelligence in China, signaling a strategic move in the AI space.
These developments have provided a modest boost to Apple’s stock, which has climbed just over 1% in the past five days, despite an overall 6% decline since the beginning of the year.
However, not everyone is convinced this momentum will last. Edison Lee, an equity research analyst at Jefferies, remains skeptical, cautioning that market enthusiasm surrounding Apple’s recent announcements may be misplaced.
“We maintain our cautious stance on [Apple], despite the upcoming launch of [the iPhone SE] and a possible AI collaboration with [Alibaba],” Lee stated in a note to investors on Wednesday.
What to Expect from the New iPhone SE
According to Bloomberg’s Mark Gurman, Apple’s new iPhone SE will debut next week, with an estimated price ranging between $400 and $500. The phone is rumored to feature a design reminiscent of the iPhone 14, incorporating Face ID, a larger screen, and an upgraded processor for enhanced performance.
One of the key selling points of the iPhone SE is its affordable pricing, significantly lower than the $799 iPhone 16. Additionally, it will be one of the first budget-friendly iPhones to integrate Apple Intelligence, the company’s generative AI platform. This AI suite offers features such as notification summaries, advanced writing tools, and AI-powered photo editing. Apple Intelligence also enhances Siri’s capabilities, enabling deeper integration with OpenAI’s ChatGPT.
By making Apple Intelligence available on a more affordable device, Apple aims to broaden its user base and increase engagement with its AI ecosystem. However, whether this strategy will translate into increased demand remains uncertain.
Will Apple Intelligence Drive Sales?
Despite Apple’s efforts to promote its AI-powered iPhone 16 lineup, the reception has been less enthusiastic than expected on Wall Street.
During Apple’s latest earnings call, CEO Tim Cook highlighted that iPhone sales were stronger in markets where Apple Intelligence is available. However, Morgan Stanley Research analyst Erik Woodring expressed doubts about the AI-driven sales boost, suggesting that any increase was more likely due to U.S. consumers purchasing discounted iPhone 15 Pro and Pro Max models rather than demand for Apple Intelligence.
Currently, only the iPhone 16 and select iPhone 15 Pro models support Apple Intelligence, limiting its reach to a smaller segment of users.
Challenges Facing the iPhone SE in China
In his investor note, Edison Lee voiced concerns about the iPhone SE’s potential appeal, citing its reported single rear camera as a possible drawback. Additionally, he questioned whether Apple Intelligence would be a compelling selling point, particularly in China, where smartphone demand has softened after the Lunar New Year.
Despite these challenges, Apple remains committed to expanding its AI capabilities and offering more affordable device options to attract a wider audience. Whether these strategies will pay off in the long run remains to be seen.
