Apple is positioning itself for a transformative 2025, with generative AI taking center stage as the company’s most critical growth driver. According to Gene Munster, managing partner at Deepwater Asset Management, the “biggest story” for 2025 will be how Apple Intelligence—the company’s proprietary AI software—impacts iPhone sales. Despite criticism for being late to the generative AI race, Apple’s AI push has generated significant buzz, with some analysts predicting a potential “super cycle” for iPhone upgrades.
Wedbush Securities analysts project Apple will ship more than 240 million iPhones in 2025, breaking its annual record. However, this ambitious target depends heavily on Apple’s ability to deploy Apple Intelligence across all eligible devices globally. The rollout faces significant geographical challenges: in the European Union, Apple Intelligence won’t arrive until April 2025, while in Greater China—a crucial market—Apple must navigate strict regulatory requirements by partnering with local tech companies like Tencent or ByteDance, according to Reuters.
Beyond smartphones, Apple faces pressure across multiple product lines. The $3,500 Apple Vision Pro, launched with great fanfare in 2024, experienced disappointing demand. Meanwhile, Meta’s more affordable AI-powered Ray-Ban smart glasses gained traction, prompting Munster to predict Apple may pivot toward a smart glasses form factor. Reports suggest Apple is developing more accessible products, including a new iPhone SE with Apple Intelligence capabilities and a wall-mounted smart home tablet that could launch as early as March 2025.
Geopolitical tensions add another layer of complexity. With Donald Trump threatening 60% tariffs on Chinese goods and Apple relying on China for 95% of its iPhone, AirPod, Mac, and iPad production, the company faces potential supply chain disruptions and retaliatory levies that could impact sales in one of its most important markets.
Apple’s legal challenges continue as well, with a federal judge expected to decide by January whether the company’s Department of Justice antitrust lawsuit will proceed to trial. As Jacob Bourne, tech analyst at EMARKETER, notes, “Apple needs to carefully time—and price—new products and features to align with consumer demand rather than just technological capability.” The company’s 2024 investments in AI, including its partnership with OpenAI, position it for potential success, but analysts emphasize that the true payoff remains to be seen in 2025.
Key Quotes
The ‘biggest story’ for 2025 will be the impact of the new Apple Intelligence software on iPhone sales
Gene Munster, managing partner at Deepwater Asset Management, emphasized that Apple’s AI software will be the defining factor for the company’s performance in 2025, highlighting how central AI has become to Apple’s business strategy.
We expect Apple will ship more than 240 million iPhones in 2025, breaking its annual record
Wedbush Securities analysts made this bold prediction in their 2025 tech wish list, suggesting that Apple Intelligence could drive unprecedented iPhone demand and create the long-anticipated “super cycle” of upgrades.
Apple needs to carefully time—and price—new products and features to align with consumer demand rather than just technological capability
Jacob Bourne, tech analyst at EMARKETER, cautioned that Apple’s success depends not just on AI innovation but on strategic product positioning, particularly as the company faces competition from more affordable alternatives like Meta’s smart glasses.
Our Take
Apple’s 2025 trajectory illustrates the high stakes of AI integration for established tech giants. While the company was criticized for tardiness in embracing generative AI, its methodical approach—partnering with OpenAI while developing proprietary capabilities—may prove strategically sound. The real test lies in execution: deploying AI across diverse regulatory environments, maintaining hardware margins while competing on price, and demonstrating tangible value that justifies device upgrades. The China challenge is particularly revealing, showing how AI nationalism and geopolitical tensions are fragmenting the global tech landscape. Apple’s reported pivot from Vision Pro to smart glasses suggests the company is learning from Meta’s playbook, recognizing that AI’s killer applications may emerge in more accessible form factors. The success of Apple Intelligence in driving iPhone sales will serve as a crucial indicator of whether AI features alone can motivate mass-market consumer upgrades—a question with implications far beyond Apple itself.
Why This Matters
Apple’s 2025 AI strategy represents a critical inflection point for the world’s most valuable technology company and the broader AI industry. As one of the last major tech giants to introduce consumer-facing generative AI, Apple’s success or failure with Apple Intelligence will significantly influence mainstream AI adoption and consumer expectations. With a potential 240+ million iPhone shipments, Apple could put AI capabilities in the hands of hundreds of millions of users, accelerating the technology’s integration into daily life.
The company’s challenges in China highlight the geopolitical complexities of AI deployment, as different regulatory frameworks require localized partnerships and compliance strategies. This fragmentation could shape how AI technologies develop globally, potentially creating distinct AI ecosystems in different regions. Additionally, Apple’s pivot from expensive mixed reality headsets toward more accessible AI-powered devices reflects broader industry trends toward practical, affordable AI applications rather than experimental hardware. The company’s ability to balance innovation with consumer demand, navigate international tensions, and compete with rivals like Meta and Samsung will provide crucial insights into AI’s commercial viability and the future of consumer technology.
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Source: https://www.businessinsider.com/what-apple-2025-might-look-like-ai-iphone-china-2024-12