Hong Kong Stock Concept Tracking | Apple raises iPhone 16 series stocking target to around 90 million units this year! AI initiates a new round of replacement cycle (with concept stocks)

According to the Zhitong Finance and Economics APP, as of the closing on July 9th Beijing time, Apple (AAPL.US) stock price continued to hit a historic high, rising over 0.65% to $227.82, with a total market value close to $3.5 trillion, surpassing Microsoft to return to the top spot in the U.S. stock market. Previously, industry insiders indicated that Apple has raised the iPhone 16 series' shipment target to around 90 million units this year; during the 618 e-commerce promotion period, Apple's sales saw a significant increase, which may boost Apple's sales expectations for the iPhone 16 series. Sinolink Securities stated that there is still room for growth in Apple's supply chain, focusing on investment opportunities brought by AI terminals. Apple's differentiation in AI is expected to bring competitive advantages, leading to a new wave of upgrades and significant growth for the supply chain. The upgrade of AI terminals is expected to continue, and there is still room for growth in Apple's supply chain, so it is recommended to continue monitoring.

Specifically, according to the Golden Bull of China Securities, information obtained from Apple's supply chain companies indicates that the shipment target guidance for the iPhone 16 series has been slightly raised recently. After the adjustment, the shipment target guidance for the iPhone 16 series this year is around 90 million units. Another source from an Apple supply chain company confirmed to reporters that Apple has indeed slightly raised the shipment target guidance for the iPhone 16 series recently. Executives from Apple's supply chain companies analyzed to reporters that during the 618 e-commerce promotion in June, Apple adopted a price reduction strategy. After the price reduction of the iPhone 15 series, sales significantly increased, which may have boosted Apple's sales expectations for the iPhone 16 series.

Wedbush Securities cited the latest supply chain inspection results, stating that Apple's iPhone is showing more and more stable signs in various markets. Analyst Dan Ives wrote in an investor report, "We believe that after better-than-expected performance in the first quarter, optimistic signs of iPhone growth are emerging in various markets. Ultimately, we believe the second quarter will be the last quarter of negative growth in the Chinese market, and the turning point for growth will begin in the third quarter. The Chinese market remains key to Apple's growth, and we believe that starting from the iPhone 16, this key region will once again achieve growth."

Looking back at the previous upgrade cycle, Apple's last upgrade cycle occurred during the 5G upgrade from 2020 to 2021.

On October 13, 2020, Apple launched its first 5G phone, the iPhone 12 series. The shipment volume in the fourth quarter of 2020 began to significantly increase year-on-year, a trend that continued until the third quarter of 2021 (according to IDC, the year-on-year shipment growth rates for 2020Q4-2021Q3 were 18.6%, 50.5%, 18.2%, and 22.7% respectively). In terms of the whole year, in 2020, iPhone shipments reached 203 million units (an increase of 12 million units year-on-year), and in 2021, iPhone shipments reached 236 million units (an increase of 33 million units year-on-year) Subsequently, the iPhone entered a stock cycle again, with 225/231 million units in 2022-2023.

Focusing on this replacement cycle, Apple's new round of replacements will come from AI-driven technology (due to the threshold effect of 8GB of operating memory, only the iPhone 15 Pro and iPhone 15 Pro Max models in existing phones can support Apple Intelligence).

According to statistics, as of 2023, there are 1.46 billion active iPhone devices globally. Even excluding the 230 million new iPhones shipped in 2023, the number of active devices still reaches 1.23 billion. Therefore, the replacement momentum brought by "AI experience + hardware exclusivity" is worth looking forward to. It is worth noting that the replacement trend brought by AI will be stronger than the one brought by the 5G upgrade, as Apple's differentiated advantage in AI implementation is stronger (specifically, during the 5G replacement cycle, there is no fundamental difference between Android and Apple, both achieving higher network transmission rates;

CITIC Securities pointed out that during the AI replacement cycle, Apple's system-level AI advantage is significant, while the Android side has not yet integrated cross-application data calls, resulting in a clear short-term gap in positioning. In addition, AI is expected to bring users a better user experience. Therefore, there is optimism about the iPhone replacement cycle among the vast user base, and the iPhone is expected to have a strong replacement momentum in 2025. It is estimated that the iPhone shipments in 2024/2025/2026 may reach 225+/240+/250+ million units, entering an upward trend in shipments. Looking ahead, the curtain is rising on Apple's innovative year, firmly optimistic about Apple's software and hardware innovation cycle.

Huafu Securities believes that Apple's AI is opening a new round of replacement cycles and continues to be optimistic about the revolutionary opportunities in the Apple ecosystem. Apple's system-level AI capabilities lead the industry: Siri adopts an edge-cloud hybrid solution, GPT-4o and edge models empower natural language interaction together. It also has screen perception capabilities, allowing personalized fine-tuning of models based on user activities at the edge. It supports cross-application data and information calls, breaking the previous data fragmentation among various apps. Apple's AI drives phone replacements: conservatively estimated, over 90% of iPhones in stock will not be able to adapt to Apple's AI features. Therefore, there is a huge demand for replacements of existing iPhones.

Related Concept Stocks:

Goertek Inc. (01415): CITIC Securities stated that Goertek is currently the main supplier of front camera modules for Apple's iPhones and iPads, with the rear camera share expected to gradually increase. The company has a long-term stable cooperative relationship with Apple in the front camera field, with deep technological reserves. After being acquired by Lixing, the company has made significant progress in cost control, customer service, etc. In 2024, the company will enter the field of rear cameras for iPhones, which is expected to drive up module ASP and the increase in market share will bring significant performance growth to the company SUNNY Optical Technology (02382): According to market sources, SUNNY is continuing its cooperation with Apple in the AR/VR field, and the company has officially entered the iPhone camera supply chain. Guosen Securities pointed out that looking ahead to 2024, with high-end customers driving demand, the company's shipments of mobile phone lenses are expected to increase by 5% year-on-year, while the total shipments of mobile phone modules are expected to remain stable but with an improved structure. The gross profit margin of mobile phone lenses and modules is expected to increase significantly.

BYD Electronic (00285): As early as 2012, BYD started manufacturing phones for Apple and producing electronic products such as iPads on behalf of the company. Huayuan Securities believes that the consumer electronics sector achieved revenue of 97.4 billion in 2023, accounting for 75% of the company's total revenue. In recent years, the company has entered the North American major customer market, continuously expanded its core product lines, increased market share, and achieved business growth against the trend in the consumer electronics sector. In May 2024, an overseas major customer will release the iPadPro product equipped with the M4 chip, with hardware performance gradually meeting AI task requirements