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Let's turn our attention to some trending tickers that we're watching on this Monday morning. Shares of Apple moving higher this morning following a slew of upgrades citing the potential of its AI software. Joining us now to discuss, we've got Wamsi Mohan, Bank of America IT and hardware analyst, who recently raised his own price target on Apple. Wamsi, it's great to have you on to talk about this. Uh, I know you have increased confidence in a multi-year iPhone upgrade cycle and that's part of what drove your price target increase. Talk to me about where that confidence comes from.

Yeah, good morning. Thanks for having me. Uh, yeah, look, I, I mean, I think that we, we ran a survey, um, which is fairly broad-based, covers four major geographic regions. Uh, and it's been a longstanding survey. We've been running this since 2018. It's very unusual for Apple to actually talk about future products and releases, right? Like they basically said iPhone 15 Pro and newer would be needed to run some of these Apple intelligence features. Uh, so we thought the survey was going to be somewhat pertinent to see after worldwide developer conference, did people actually change their decision to buy an iPhone in 2024? And we did see a meaningful uptick in the number of people who basically said, yes, we would like to upgrade our phone this year based on the future, based on the future functionality that Apple is introducing. So a, we think that, you know, this is going to be a start. We have, we know obviously all the features won't be available to everyone at the same time. So we actually think of this as more of a multi-year cycle, uh, given that the survey also shows that the install base age is actually quite old. There's still a whole lot of iPhone 11s, 12s, and 13s in the install base. So we actually expect a lot of that install base to come up for refresh at the same time when all these new feature functionalities are starting to hit consumers.

Yeah, it was interesting the evening of the worldwide developers conference. The stock really wasn't moving that much to the upside and then you had a slew of kind of commentary surrounding it, uh, and the news of day, and that really led to some broader gains for Apple. So I'm curious from your perspective, where do you get clarity on hype versus actual excitement that's going to convert to sales regarding these iPhone AI features?

Yeah, absolutely. Great question. Look, I, I think that when, when Apple sort of tends to introduce products, uh, they are really ready for the consumer, right? Like so we, we don't see them jump the gun, not generally first to market, but at the same time, and we have a slew of already phones from, from Chinese competitors, from Samsung and others, uh, that have some of these AI features. So Apple's not first to the game, generally not, but when they do come, you, you have a high degree of confidence that whatever product they're coming up with is going to act extremely well. So now from a perspective of like, you know, how much of this is hype versus reality, right? I, I think that when you look at the feature functionality, this is where you can start to think about a step function change in productivity. We all aim for so much productivity in our daily like working lives and, and try to optimize, but really for from an iPhone perspective and in our personal lives, we haven't had the opportunity to really capitalize on some of these productivity initiatives, right? And what I'm talking about is just, you know, ordering at restaurants or, or going from place to place where Ubers. A lot of this stuff can actually be automated, but we go and jump across so many different apps to try to get this, just our daily routines in place. And so, uh, what I think is that, you know, this is going to take some time to roll out and, and they also introduced at worldwide developer conference very deep integration with Siri. I think this is the part that really was not understood well by the broader community is how deep this integration can go and what kind of changes that can bring. And I think that once people got comfortable with the fact that, look, I mean, Siri is going to be an assistant that you don't want to turn off as you wanted to in the past, but rather one that you would want on that can help you with all your features. I just think that we're entering a new paradigm over here where consumers are really going to see this increased benefit of productivity over time. And I think that that's really key to understanding this upgrade cycle. And as those features roll out and over the next several quarters, more and more developers are going to integrate Siri even more deeply. It could start with Uber, maybe Lyft would follow. You could see OpenTable or others start to integrate. So as you see that really, that snowballs into, into sort of this effect of people wanting to upgrade for all the feature functionality.

Right.