Apple Enters Talks for AI Integration
Apple Inc AAPL is currently engaged in active discussions with Alphabet Inc GOOG GOOGL to potentially incorporate Google’s Gemini AI engine into the iPhone.
Potential Hardware Enhancements in 2025
As per insights from BofA Securities, if Apple successfully collaborates with Google or OpenAI, it could introduce additional hardware features by 2025.
An Analyst’s Perspective
The Apple Analyst: Wamsi Mohan, who upheld a Buy rating for Apple, has set a price target of $225 for the company.
The Impact of AI Integration
The Apple Thesis: Mohan envisions that AI implementation could trigger a “multi-year upgrade cycle” and aid in enhancing gross margins in the future.
“It remains unclear if Apple will choose to leverage a cloud-based model that could potentially have higher latency vs. on device option,” Mohan mentioned. “We view incremental on-device functions especially in 2025,” he added.
Considering Apple’s vast base of 2.2 billion users, Mohan pointed out that a licensing deal based on usage volumes could prove to be exorbitant, while a fixed license for cloud-based use might not be feasible economically for partners.
He also suggested that Apple might opt for a fixed charge per device on-device pricing model, “to accelerate time to market, while also advancing their in-house technologies.”
Market Performance
AAPL Price Action: Apple’s stock recorded a 1.61% increase, reaching $175.41 at the time of publication on Monday.
Read Next: Apple Is Sending Alphabet Stock Higher Monday: What’s Going On?
Photo: Andy Wang via Unsplash
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