Apple is on the verge of hitting a major milestone, with its market capitalization expected to reach $4 trillion soon. A big part of this growth is attributed to its advancements in artificial intelligence (AI). Despite the iPhone 16 being nearly identical to the iPhone 15, analysts believe Apple’s push into generative AI could spark a significant increase in iPhone demand, potentially leading to a "supercycle."

The iPhone 16 series does not offer major design changes but focuses on enhancing user experience through new features, particularly in AI. Experts believe the introduction of Apple Intelligence will help push the company toward its next big leap, making generative AI a central part of the iPhone’s appeal in the coming years.

Apple’s stock price has climbed by 16% since November, reflecting a $500 billion increase in market value. However, analysts note that demand for iPhones remains relatively subdued. A major factor is the limited rollout of Apple Intelligence. Experts like Morgan Stanley’s Erik Woodring predict that once the AI features become more widely available, demand will increase.

In China, where Apple faces strict regulations, the company is working with Tencent and ByteDance to overcome obstacles to AI adoption. This is crucial, as China is the largest smartphone market and a key contributor to Apple’s iPhone sales.

Apple’s Services division has been a strong performer, helping to offset the slowdown in hardware sales. Projections show that this segment will bring in $100 billion in revenue by 2025, accounting for 25% of Apple’s total revenue. Some analysts estimate that by the end of 2024, services could be valued at up to $1.6 trillion.

Although the rollout of generative AI features has been slow, the focus on improving AI integration across Apple’s ecosystem remains key. Apple’s future success will depend on overcoming regulatory hurdles and continuing to scale its AI capabilities, especially in markets like China.

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