Morgan Stanley analysts provided insights into what to expect at Apple's (NASDAQ:AAPL) upcoming "Glowtime" event on September 9th, where the tech giant is expected to unveil the iPhone 16, new Apple Watches, and potentially new AirPods.
According to Morgan Stanley, the event will likely focus heavily on the integration of Apple Intelligence, Apple's AI technology, within the iPhone 16. This feature is expected to be highlighted by the increased DRAM and a more powerful system on a chip (SoC).
According to the bank, "iPhone pricing and iPhone battery life will also be key details to watch for."
The analysts predict that the pricing for the iPhone 16 will remain unchanged from last year, but Apple may eliminate the 128GB iPhone 16 Pro option. This move could drive a 5% year-over-year increase in the average selling price (ASP) for fiscal year 2025.
"Key event wildcards include: 1) AirPods launch, 2) new AI features/languages, 3) aggressiveness of carrier subsidies, and 4) how iPhone trade-in values change," adds Morgan Stanley.
The bank notes that historically, the iPhone launch event has led to a slight underperformance in Apple's stock on the day of the event, followed by modest outperformance over the next three months.
However, Morgan Stanley remains optimistic about Apple's ability to drive a multi-year product refresh cycle and accelerate iPhone replacement cycles.
The analysts believe that the introduction of Apple Intelligence with the iPhone 16 could unlock pent-up demand and support positive iPhone build revisions over the next 3-12 months.
Morgan Stanley continues to view Apple as their top pick, emphasizing the potential impact of this new product cycle on the company's performance.