According to the Vantage Smart Finance APP, Citigroup, a major Wall Street firm, released a research report on Wednesday stating that in the intensifying competition in the Chinese smartphone market, after Apple Inc. (AAPL.US) significantly reduced prices, the demand for high-end flagship iPhone products in the Chinese market is showing signs of stable recovery. This growing demand trend in the Chinese market is crucial for Apple's AI strategic layout and overall performance. Citigroup analysts reiterated their "buy" rating on Apple stock, with a 12-month target price as high as $210. Apple's stock price rose 0.69% to $195.69 in early trading on the US stock market, approaching last December's all-time high of $199.093. In a research report to investors, Citigroup stock analyst Atif Malik wrote, "Recent third-party statistics indicate that demand for iPhone smartphones in China is stabilizing and recovering." "Our review of the Asian supply chain also indicates that demand is stabilizing. Meanwhile, Apple had already launched more aggressive sales discounts in the Chinese market before the 618 online shopping festival, and we believe this will also boost Apple's sales for this quarter." "Bone-breaking price" significantly boosts iPhone demand in China! At the end of last month, official data from China showed that in April, iPhone shipments in the Chinese market surged under the stimulation of major e-commerce platforms' Apple flagship stores' large price reductions and promotions. In addition to Apple's more heavyweight price reduction measures on major e-commerce platforms in China in May, the "bone-breaking price" of high-end iPhones is expected to stimulate stable recovery in iPhone sales in May. The latest data from the China Academy of Information and Communications Technology shows that demand for Apple's flagship product iPhone saw a sharp rebound in April in the Chinese market, with shipments increasing by 52% year-on-year, thanks to a series of discounts provided by its authorized e-commerce retail partners. The latest official data shows a sharp increase in smartphone shipments in China, with China Academy of Information and Communications Technology statistics showing that in April, about 3.5 million units were from foreign brands, with iPhones accounting for the vast majority. After experiencing a sharp decline in sales in the Chinese market in the first two months of this year, iPhones recorded year-on-year growth in March and April. In late May, Apple's major flagship stores on Chinese e-commerce platforms announced the largest price reduction in history. Due to the fierce competition Apple faces in the high-end smartphone market from domestic manufacturers such as Huawei, OPPO, Vivo, and Xiaomi, Apple has been forced to boost iPhone sales in the Chinese market through price reductions and promotions At the Tmall Apple Store, starting from May 20th, after combining official discounts and Tmall coupons, the promotional prices for the iPhone 15 Pro start at RMB 7999 before discount and RMB 6099 after discount; while the iPhone 15 Pro Max starts at RMB 9999 before discount and RMB 7949 after discount. In the AI era, Apple will be the "leader" in the tech industry, not a "follower". In this country with the world's second-largest population, the recovery trend of iPhone shipments in the Chinese market is very important, as this tech giant will start its artificial intelligence business from next week's developer conference, introducing a new version of Siri voice assistant embedded with AI large models and a new iOS system may arrive soon. The healthy demand for iPhone upgrades in the Chinese market is crucial for Apple. According to media reports, Apple's on-device AI features, such as the new version of Siri that may integrate GPT-4 or other AI large models, will require iPhone 15 Pro or higher versions to run smoothly. As for the most concerning generative artificial intelligence among global investors, compared to other tech giants, Citi analyst Malik believes that Apple has a very unique advantage. "Apple controls its AI chip design through its seamlessly integrated hardware, software, and service ecosystem, giving them a good starting point," Malik added. "With over 2 billion product installations, the company has a massive user base and a large amount of proprietary data to optimize user AI experiences. At the same time, privacy and security have become one of the most concerning issues for generative AI models, and it is well known that Apple places more emphasis on privacy and data security than its peers. Data security will be a key advantage for the company, and we hope they will also spend time discussing their efforts in privacy and data security protection at WWDC." Steve Eisman, the prototype of the movie "The Big Short," also believes that Apple will be a potential big winner in the AI boom. He explained that in the long run, Apple will become the most crucial application center for AI dominant software, bringing huge growth potential to its products. "I am well aware that when all these groundbreaking AI applications emerge, I will need a new smartphone, a new iPad, and a new laptop. Therefore, the biggest beneficiary when these applications emerge may be Apple." Another Wall Street giant, Bank of America, pointed out that smartphones, tablets, and other devices will need more powerful hardware computing capabilities in the future to handle the daily scale of breakthrough AI applications. This means the "best device upgrade opportunity" for smartphone and other consumer electronics manufacturers. The bank expects this to drive over 2 billion active users of Apple smart devices into the AI device stage. ** **Bank of America reiterates its "outperform" rating on Apple stock, expecting the tech giant to announce its generative artificial intelligence strategy at an upcoming developer conference. Analyst Wamsi Mohan from Bank of America wrote that the latest AI-powered iPhone series may drive a "multi-year" upgrade cycle, similar to the situation when the smartphone revolution began. Bank of America has set a 12-month target price for Apple at up to $230, with the bank expecting the adoption curve of AI smartphones to be faster than that of 5G era smartphones. The bank also pointed out that the number of upgrades may trigger a once-in-a-decade iPhone event. Analyst Mohan added that while many features of the next generation iPhone may be gradually revealed after the Apple developer conference, this conference is likely to make AI smartphones mainstream, especially as conversational AI tools like ChatGPT become more integrated into consumers' daily lives. Currently, leading smartphone hardware manufacturers are developing their own large models and embedding offline-operable edge-side large models into new models to create the so-called "AI large model smartphones." Compared to general AI large models that rely on cloud computing power, edge-side local large models can allow smartphone users to use products like ChatGPT more efficiently, conveniently, and securely. Leveraging edge-side AI is expected to achieve a more personalized "private AI assistant" that better meets users' individual needs, similar to an "AI companion" as seen in the movie "HER." To run AI large models on smartphones, some smartphone hardware manufacturers are studying the integration of dedicated AI processors. These proprietary AI chips are designed to efficiently handle AI tasks, aiming to improve computational efficiency and energy consumption ratio. Manufacturers are also striving to combine cloud computing and edge computing, completing certain complex AI processing tasks in the cloud while handling real-time or sensitive tasks locally. They are also exploring techniques such as model pruning, quantization, and knowledge distillation to reduce the actual scale and computational requirements of large models, making them suitable for running on resource-constrained application devices. Renowned research firm Canalys recently released a research report, forecasting that 16% of global smartphone shipments will be AI smartphones by 2024. By 2028, the firm expects this proportion to exponentially increase to 54%. The compound annual growth rate (CAGR) of the AI smartphone market size from 2023 to 2028 is projected to reach 63%, primarily driven by consumer demand for enhanced features such as AI-powered assistants and edge-side automation processing; It is expected that this transition will first appear in high-end smartphones, and then gradually be adopted by mid-range smartphones, reflecting the trend of edge-generated AI as a more ubiquitous advanced technology penetrating the overall smartphone market