Minsheng Securities: Apple's new product launch, Apple Intelligence, is about to go live

According to the financial news app Zhitong Finance, Minsheng Securities released a research report stating that Apple (AAPL.US) has officially launched a new device and increased its investment in AI on the device side. Apple Intelligence, as the core of personalized AI systems, is expected to drive a new wave of upgrades in the coming year. In terms of hardware, it is expected that next year, the iPhone will see significant upgrades in heat dissipation solutions and the soft-hard board structure process, benefiting related industry chain companies. With the continuous iteration and upgrade of AI models on the device side, it is predicted that many of Apple's design innovations next year will focus on heat dissipation, leading to a revolution in the iPhone's heat dissipation solutions. Additionally, upgrades in computing and storage will also place higher demands on internal space in smartphones, while the trend towards miniaturization and diversification of functions in end products remains unchanged. The team predicts that Apple's PCB will undergo many upgrades in materials and processes next year.

Event: At 1:00 am Beijing time on September 10, 2024, Apple held its autumn new product launch event: unveiling the new iPhone 16 series, iWatch Series 10, iWatch Ultra 2, and the new AirPods series (AirPods 4/AirPods Pro 2/AirPods Max 2).

Apple iPhone 16 New Release, Apple Intelligence Launching Soon.

1. Apple unveils new iPhone 16, iWatch, and AirPods series: ① Regarding the iPhone, the new iPhone 16/16 Plus/16 Pro/16 Pro Max start at prices of $799/$899/$999/$1199. The chip has been upgraded to A18, with ultra-wide angle + fusion main camera capable of capturing spatial videos for Vision Pro; the Pro series features a titanium metal appearance, 3 updated cameras, and improved shooting experience with camera control. ② For Apple Watch, the Apple Watch Series 10 and Watch Ultra 2 are launched, starting at $399/$799. Emphasizing a large area and thinness; aluminum and polished titanium metal are respectively 10%/20% lighter than previous generation products. ③ As for AirPods, the entire series has been updated, with AirPods 4 starting at $129 ($179 with active noise cancellation); AirPods Pro 2 starting at $249, adding 3 major functions: active noise cancellation, hearing protection, and hearing aid functions; the new color AirPods Max starting at $549.

2. Subsequent timeline: ① The iPhone 16 series will be available for pre-order on the evening of September 13 and officially released on September 20; ② Apple Intelligence will be used with software updates, launching in English in the US in October, expanding to Australia/Canada/New Zealand/South Africa/UK in December, and gradually expanding to Chinese/French/Japanese/Spanish in 2025.

AI Driving Hardware Upgrades, Heat Dissipation + PCB as Main Focus. Apple Intelligence, as the core of personalized AI systems, requires high computational power chips and memory to accommodate large models Apple is customizing and developing the A18 for the iPhone 16, which features the latest 6-core CPU (2 performance cores + 4 efficiency cores) and a desktop-level GPU architecture (new 5-core GPU), significantly improving efficiency compared to the previous generation. The iPhone 16 has seen upgrades in both the structure and materials for heat dissipation (structurally, upgrading the motherboard and optimizing the chip's surrounding architecture; material-wise, using 100% recycled aluminum metal heat dissipation substructure). Alongside continuous iteration and upgrades of AI edge models, Minsheng Securities predicts that Apple's many design innovations next year will focus on heat dissipation, leading to a revolutionary change in the iPhone's heat dissipation solution. Furthermore, upgrades in computing and storage will also place higher demands on internal space of the phone, while the trend towards miniaturization and diversification of terminal products remains unchanged. Minsheng Securities predicts that Apple's PCB will see many upgrades in materials and processes next year.

Investment Advice: Apple's new phone is officially released, with increased investment in edge-generated AI. AppleIntelligence, as the core of personalized AI systems, is expected to drive a new wave of phone upgrades this year and next. Additionally, in terms of hardware, Minsheng Securities predicts significant upgrades in the iPhone's heat dissipation solution and soft-hard board structure technology next year, which may benefit related industry chain companies. Recommended stocks to watch: Luxshare Precision Industry Co., Ltd. (002475.SZ), GoerTek Inc. (002241.SZ), Crystal-Optech Co., Ltd. (002273.SZ).

Risk Warning: Apple's iPhone sales fall below expectations, AI innovation falls short, exchange rate fluctuations