Apple will announce the iPhone 16, which will include AI features, 8GB of RAM, and Arm’s V9 CPU.
TakeAway Points:
- The new A18 Bionic chip and improved AI capabilities will be featured in Apple’s September 9 iPhone 16 range.
- Adoption of the V9 architecture by Arm increases royalties; shares will increase 70% by 2024 as a result of investment in AI and diversification.
- The analyst consensus for FY2025 calls for an 8% YoY increase in iPhone sales; BofA Research keeps its “Buy” rating with a $256 price target.
iPhone 16 release
Apple is set to unveil its iPhone 16 lineup on Monday, September 9th, at its Cupertino headquarters. The event, themed “It’s Glowtime,” will introduce four new iPhone models: the iPhone 16, 16 Plus, 16 Pro, and 16 Pro Max. The iPhone 16 and 16 Plus will feature minor updates, including faster processors and 8GB of memory, up from 6GB in previous models. These lower-end models will also include the Action button and vertically stacked rear cameras for spatial video recording.
The iPhone 16 Pro and Pro Max will see more significant changes, including larger screen sizes of 6.3 inches and 6.9 inches, respectively, with slimmer bezels. Both Pro models will feature the new A18 Bionic chip, based on Arm’s V9 architecture, and an enhanced neural engine optimized for AI. Camera upgrades include a 48-megapixel ultrawide-angle lens and a dedicated, touch-sensitive button for taking photos and videos. The Pro models will also come in a new gold titanium color, replacing the previous blue titanium option.
Apple Intelligence Integration
Apple is making a significant push into generative artificial intelligence with its new suite of AI tools, collectively called “Apple Intelligence.” These tools include an updated Siri digital assistant, custom emoji generation, and advanced photo editing capabilities. Apple Intelligence will initially be available on the iPhone 15 Pro and Pro Max models, which feature the A17 Pro chip using Arm’s V8 architecture. The new A18 chip in the iPhone 16 Pro models will further enhance these AI capabilities.
Apple has also announced a partnership with OpenAI to provide users with free access to ChatGPT and a new “Private Cloud Compute” infrastructure aimed at securing user data. However, many key features of Apple Intelligence are still in development and will be rolled out in a staggered approach, with some features and regions receiving updates later.
Financial and Market Impact
Apple’s adoption of Arm’s V9 architecture for its iPhone 16 models is a significant boost for Arm, which has a multiyear licensing agreement with Apple. Arm’s CEO, Rene Haas, has stated that the V9 architecture brings in twice the royalties of the previous V8 generation. Arm shares have risen about 70% since the start of 2024, benefiting from diversification into PC, automotive, and industrial chips, as well as increased investment in AI chips.
Apple’s event comes at a crucial time as the company aims to prove its capabilities in generative AI to both consumers and Wall Street. The iPhone 16 launch is expected to kick off a new software-driven upgrade cycle, with analysts predicting an 8% year-over-year increase in iPhone sales for fiscal year 2025. BofA Research maintains a “Buy” rating for Apple, with a price target of $256, citing the potential for compelling AI features and third-party integrations to drive stock performance.
