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Well, moving on here, Apple's product event shining a spotlight on the tech giants' latest innovations, Apple revealing its latest AirPods revamp, new Apple Watch models, and of course, an all-new iPhone. CEO Tim Cook pointing to the AI capabilities for the iPhone 16.

The next generation of iPhone has been designed for Apple intelligence from the ground up.

It marks the beginning of an exciting new era.

Well, for more on Apple's fresh batch of product announcements, we've got Creative Strategy CEO and principal analyst Ben Bajarin. Ben, it is great to have you on the show. You know, big question for investors, of course, Ben, you know, this new iPhone 16 is going to spark a meaningful iPhone upgrade cycle. Last time we talked to you, Ben, you said you did expect that this have, you know, I think you said a stronger than normal refresh cycle. I believe that's how you framed it, which is sound relatively bullish. Now that we officially have the news, Ben, you're sticking with that view?

Yeah. And I think I just I want to continue to temper as I've been largely like, we don't think supercycle because there was dynamics that led to the last supercycle which I don't think are repeated here. But that being said, I do think that there is so much evidence that Apple has a very, very aging installed base, a good portion of the base going back to even just iPhone 12 and beyond. So you have to imagine that a lot of those folks are just up against their upgrade cycle. And so I look at this within that lens of a huge portion of their base with aging devices looking and trying to be enticed, right, to buy. And I think they did a really good job with this lineup. In fact, I actually think that the um that the base iPhone 16 is probably the best base iPhone they've ever made, which could actually very interestingly lead to a stronger cycle for the base model where this is actually we've actually noticed an a mix shift the last couple of years to the pro. And I think if that happens if this aging base does more opt for iPhone 16, um we might see more of that mix shift either go toward iPhone 16, which again, is not something we've seen before and um we'll see a stronger uh stronger cell cycle for that, which again, might impact ASP slightly, but I do think there's a lot of optimism and a lot of stuff to increase and entice upgraders to the base level iPhone 16 just because of how good that product is.

Interesting. We're showing some of the demo of that. By the way, I like the contrast between um uh Tim Cook standing in front of a big screen of uh an outdoor scene and you actually outdoors in front of real trees. Those are not AI trees behind you, Ben Bajarin. Um but um that brings up AI and we are seeing the stocks at the low stock at the lows of the session. The company said it wasn't coming out with any new Apple intelligence features today that we didn't know about already. It wasn't really expected that they would, was it? Or or were you looking for a little bit more on that front?

I I mean, I do think there's a couple of things, right? With the iPhone 16 lineup, they do have this feature called uh Visual Intelligence, which basically lets you use the camera to take a picture of any object and then it will go and get that information about what that is. Um that's useful. I think that's coming only to uh the iPhone 16 models and beyond. So there is that one thing that sort of sets it apart, but other than that, the vast majority of Apple intelligence experiences will come to iPhone 15 and later and we know that that's coming out um in a open beta to to everyone in October and then more of those features like Genmoji and a whole host of other things coming out um uh later on in or early into into next year. So all of that I think is relevant to to two things. One, I think there's just a lot of people who do need to upgrade. I think the hardware will entice them. I think the carrier uh promotions will entice them with the hope that Apple intelligence continues to be very, very interesting and helps sell this cycle and strengthen this cycle over time. But I'm not sure that's going to be the immediate rush just again because we don't know when many of these feature these new features are coming out. And I think it's just still going to be a hardware rush, which is why I say very, very compelling and just the base hardware capabilities of iPhone 16 to entice those upgraders.

Ben, I'm curious because you do a lot of important survey work. Why typically do people decide to upgrade? You know, what's the reason? Is it battery? Is it camera? Design changes? All three?

Yeah. So it's it's a great question, Josh. I mean, we have always a list of options in our surveys and one of them is just it's old and slow and it would not shock you that that is the predominant reason that people choose is that it just feels old and slow. And I think, you know, when you just look at how good phones have gotten the last few years that they do, they last a really long time. We're using premium components, particularly Apple. Um the silicon can sustain a long period of OS updates, so they hasn't felt the need to to really upgrade. In fact, I I talked about this maybe even with you years ago, just the idea that because Apple silicon is so good, it actually elongates this cycle because it performs so well for longer. And that's just led to people just saying, hey, I I don't have a reason to upgrade yet. I'm okay with what I have. And so I do think we're really up at that edge. In fact, I think we're up at that edge probably more so than we've really ever been in in the last couple of years, which is again why I'm I'm a little bit more optimistic to this cycle. But again, I think that benefits the iPhone 16 more than the pro, which is not something we would have talked about in last, you know, fall quarter upgrade cycles.