Apple’s ‘IntelliPhones’ will dominate the market, Bank of America says

Apple helped popularize smartphones. Now it’s going to push the world into the next era of telecommunications, this one characterized by a new type of device: AI-powered “IntelliPhones,” said senior Bank of America analyst Wamsi Mohan.

Apple has been quiet on AI but is expected to debut AI tools in its next big mobile software update, iOS 18, during its Worldwide Developers Conference (WWDC) in mid-June. The release marks a step towards what Mohan calls an “IntelliPhone” — devices that offer everything from virtual and augmented reality experiences to AI-generated personal assistance.

“While we do not expect all these features at WWDC, we do expect a pathway for the IntelliPhones to become mainstream especially as conversational AI gets more integrated into daily use along with the backend of AI agents,” said Mohan.

“As AI technology evolves the gap between IntelliPhones and traditional smartphones is likely to widen further by offering even more sophisticated and personalized functions driving the desire to upgrade,” the banking executive added.

Mohan also said AI smartphones will lead the AI revolution ahead of, say, AI-powered PCs. If Mohan’s prediction comes to fruition, that would bode well for Apple’s game of catch-up to its Big Tech rivals. For example, Microsoft, whose stock is up 30% from last year, recently announced an AI laptop sub-brand. Meanwhile, Apple is up only 9% from last year, but its development of AI iPhone software could help its stock rally as its rivals have. Mohan, for one, maintained his $230 price target for Apple, which currently sits at $191 per share.