"AI iPhone Effect to Last Until Next Year" Domestic Component Stocks 'In Focus'

Apple to Unveil New iPhone 16 Series
Featuring Proprietary AI 'Apple Intelligence'
"Positive AI Response Could Drive Mass Replacement Demand"

As the launch of Apple's first artificial intelligence (AI) smartphone, the iPhone 16, approaches, domestic component manufacturers are gaining attention. Securities firms predict that depending on consumer response to the AI features after the new product release, there could be a large-scale replacement demand extending to the 2025 next model. However, they also pointed out that caution is needed as the initial response may fall short of expectations.

According to industry sources on the 6th, Apple, the iPhone manufacturer, is scheduled to hold a new product unveiling event on the 9th (local time) to reveal the latest smartphone, the iPhone 16 series. In particular, consumer interest is focused on the AI called 'Apple Intelligence' to be installed in the iPhone 16. Accordingly, Lee Kyu-ha, a researcher at NH Investment & Securities, stated, "It could outperform Android-based AI," and predicted, "Convenience will be greatly improved through the future development of proprietary chatbots like ChatGPT."

Securities firms expect that the integration of AI in the iPhone will increase interest in Apple's value chain. Jo Dae-hyung, a researcher at DS Investment & Securities, said, "Changes are being detected at the component level regarding heat generation and power consumption issues arising from AI integration in the iPhone," adding, "Opportunities can be found in heat management materials and the expansion of organic light-emitting diode (OLED) technology to enhance power efficiency." He also mentioned, "ITM Semiconductor and Anapass are quickly reflecting changes in components due to AI expansion in their earnings. LG Innotek and BAH have the potential for upward revisions in earnings estimates."

Furthermore, the introduction of AI could shorten the replacement cycle of the iPhone, raising expectations for the next model, the iPhone 17. Ko Ui-young, a researcher at iM Securities, said, "Even though the iPhone 16 series has not yet been released, there is unusually high anticipation for the iPhone 17 series," and added, "There is a possibility that replacement demand will be greater for the next model coming out next year than for the iPhone 16." The industry expects the iPhone new product to penetrate beyond the Anglo-American markets into Europe and China in earnest around the second half of 2025. Ko explained, "The schedule and scope of support in the Chinese market, which is exclusive to foreign AI models, are particularly important, and overcoming these factors could lead to greater AI impact next year."

Meanwhile, the initial consumer response to Apple Intelligence will likely play a crucial role in future investments. Ko said, "If the initial response is positive, it could be a strong catalyst for a rebound," but also analyzed, "However, the possibility of a poor response and the entry of new competitors at the component level are risk factors."