Apple (AAPL) is reportedly preparing to launch its newest iPhone SE sometime next week, and it looks like it’s found its AI partner — Alibaba (BABA) — to help it roll out Apple Intelligence in China. Things appear to be looking up for the tech giant.
And that’s translated to a slight reprieve for the company’s stock, which is up just more than 1% over the last five days compared to a decline of 6% year to date.
But at least one analyst isn’t holding his breath. Jefferies equity research analyst Edison Lee says the market optimism surrounding the latest developments out of Cupertino is misplaced.
“We reiterate our cautious view of [Apple], despite imminent launch of [the iPhone SE] and a potential AI deal with [Alibaba],” Lee wrote in a note to investors Wednesday.
According to Bloomberg’s Mark Gurman, Apple will launch its latest iteration of the entry-level iPhone SE sometime next week. The phone is said to cost somewhere between $400 and $500 and feature a design similar to the iPhone 14, complete with Face ID facial recognition, a larger display, and a more powerful processor.
Beyond its low price point, which is several hundred dollars less than the $799 iPhone 16, the iPhone SE’s biggest feature will be the inclusion of Apple Intelligence, Apple’s generative AI platform. The service provides a number of AI capabilities including notification summaries, writing tools, and photo editing functionality. It also has a more advanced version of Siri that works alongside OpenAI’s ChatGPT.
By offering Apple Intelligence on a lower-cost iPhone, the thinking goes, Apple will attract more users to the platform, driving greater interest among consumers. But whether that happens is difficult to know.
Apple Intelligence is the main attraction of Apple’s iPhone 16 lineup but hasn’t been the smash hit Wall Street was hoping it would be.
Apple CEO Tim Cook told investors during the company’s latest earnings call that iPhone sales were higher in areas where Apple Intelligence is available. Morgan Stanley Research analyst Erik Woodring, however, wrote in an investor note on Tuesday that the software only provided a small tailwind to iPhone sales during the quarter.
Instead, Woodring said, sales were probably driven by “US consumers accelerating purchases of the discounted 1-year old iPhone 15 Pro/Pro Max.” Those phones, along with the iPhone 16 line, are the only ones that can use Apple Intelligence at the moment.
In his note, Lee wrote he remains cautious of the iPhone SE’s potential because it will reportedly only include a single rear camera. He also doesn’t see Apple Intelligence as a major selling point yet and says smartphone sales in China are already falling following the Lunar New Year.
