Morgan Stanley noted that its internal survey shows strong iPhone demand across multiple markets. The proportion of users planning to upgrade their iPhones within the next 12 months has risen to 37%, up two percentage points year-over-year, with China’s upgrade rate reaching a record high.

Earlier data from research firms indicated that iPhone sales in China increased by 23% year-over-year in the first nine weeks of the year, while the overall smartphone market declined by 4%, highlighting Apple’s relative strength in the region. At the industry level, strong demand driven by artificial intelligence has led to a shortage of memory chips, prompting many hardware manufacturers to raise prices. However, Apple has not followed with price increases.

With stable pricing for the iPhone 17 and weakening demand among Android competitors due to rising costs in lower-end models, Apple is expected to be the only major smartphone manufacturer to gain global market share this year. Investors may consider buying Apple shares around the $247 level.

Meanwhile, the market holds high expectations for a potential foldable iPhone. If launched, it would represent one of the most significant design changes in iPhone history. Surveys show that around 27% of global iPhone users are highly interested in foldable devices, with the figure approaching 40% in China.

Bank of America stated that a foldable iPhone, as a major form-factor innovation, could see strong initial demand. Supply chains are reportedly preparing for shipments of 10 to 20 million units, significantly higher than competitors. A recovery in iPhone demand is critical for Apple. According to FactSet data, Apple’s iPhone revenue is expected to reach $242.9 billion in fiscal 2026, representing approximately 16% year-over-year growth, up from $209.6 billion in fiscal 2025.

Market Interpretation:

The enhancement of artificial intelligence features is seen as a potential catalyst. Although Apple’s current AI upgrades have yet to fully impress consumers, AI functionality remains a key area of user interest. Apple is still somewhat behind Android competitors in this space, but upgrades to Siri and Apple Intelligence expected in 2026 could form an important foundation for future monetization.