Morgan Stanley Foresees Siri 2.0 & AI-Driven iOS in 2024 Morgan Stanley projects a significant leap in Apple's artificial intelligence (AI) technology with the anticipated launch of Siri 2.0 and an AI-powered iPhone in 2024.

iPhone 12 | iOS 16

Morgan Stanley, a leading investment bank, is expressing heightened enthusiasm for Apple’s advancements in artificial intelligence (AI).

Analysts at the bank predict the unveiling of a notably improved Siri, dubbed Siri 2.0, at Apple’s Worldwide Developers Conference (WWDC), and the launch of an AI-driven iPhone by September 2024.

This development is a part of what the bank describes as Apple’s “Edge AI” work, signifying a major step in integrating large language models (LLM) into Apple’s ecosystem.

The optimism from Morgan Stanley comes amid a mixed landscape of opinions on Apple.

While some analysts have downgraded the tech giant, Morgan Stanley remains bullish, maintaining a $220 price target. The bank notes mixed signals in near-term supply chain checks, indicating uneven product demand going into early 2024. Despite these uncertainties, Morgan Stanley advocates buying on weakness, citing recovery fundamentals.

An intriguing aspect of this prediction is the potential impact on iPhone upgrade cycles. Since the iPhone 12’s launch in 2020, the replacement cycle for iPhones has extended to an unprecedented 4.5 years, attributed to the plateau in innovation, improved device quality, and consumer spending challenges.

The introduction of LLM-enabled features, including Siri 2.0, is expected to reverse this trend. New hardware or component requirements might limit the backward compatibility of the operating system upgrade, compelling consumers to opt for newer models, a situation not seen since the iPhone 12’s release.

In addition to hardware sales, Morgan Stanley anticipates a boost in Apple’s Services sector.

The firm believes that Gen-AI software upgrades could enhance Services spending per user, which currently stands at $8 per month. This increase could stem from new traffic acquisition cost payments, better Services attachment, a rise in App Store purchases, and possibly a premium Siri subscription.

However, it is important to note that these predictions partially rely on rumors about Apple making significant progress in applying generative AI to Siri.

Nonetheless, the bank’s positive outlook is underpinned by Apple’s accelerated hiring of AI experts, signaling a strong commitment to advancing its AI capabilities.

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