Apple's iPhone 16 is 'the best base iPhone' yet: Analyst

we 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 Co 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 creative strategy CEO and principal analyst Ben baharon 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 the this to have you know I think you said a stronger than normal refresh cycle I believe that's how you framed it which is sound you know 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 Super Cycle because there was dynamics that led to the last Super Cycle which I don't think are repeated here but that being said I do think that there's 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 Bas iPhone 16 is probably the best Bas 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 a mix shift the last couple 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 asps 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 I-16 just because of how good that product is interesting we were 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 outoors in front of real trees those are not AI trees behind you Ben bearin 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 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 gen mooji and a whole host of other things coming out um uh later on or early into into next year so all that I think is relevant 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 um promotions will entice them with the hope that Apple intelligence continues to be very very interesting and help sell this cycle and strengthen the 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 feat 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 in just the Base Hardware capability 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 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 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 Ina 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 Ben it's funny because at one point you know there were complaints that Apple sort of timed it that the stuff would wear out on a on a cade so that you would need to get new on um but this does also raise the question of if the real Advance here is going to be more software based than Hardware based in terms of AI in the phone what is the next big Hardware change I mean you look at Huawei which is coming out with a zold phone today that like I guess folds sort of like an accordion and they've got 3 million pre-orders for that thing um is that the next thing we should be looking to yeah I mean it's it's tough because full folding phones just still have a lot of durability issues we're getting closer to solving those and I think Apple just takes the the conservative approach I think it's hard because we're sort of out of the era where we're just you know Amazed by Hardware Wizardry um I do think folding phones will make a very interesting addition to this lineup I don't expect it anytime soon um and I think because of that that's why we're leaning more towards software and the ingredient that is AI to enable some of these features that we help people view solv some pain points and adds usefulness to their life because we're just squarely in a very software cycle right now with just the very the hard challenge of year-over-year Hardware Innovation just getting more difficult but I'm I'm as optimistic as any in foldables again we don't see those sales in mass quantities um and so I I don't think it's something that Apple's on the immediate Horizon on but that certainly is an interesting form factor change that we could see in the next couple years get more traction but again we're not seeing volume in those sales categories yet Ben you know it wasn't just uh iPhone today of course you know it was airpods it was watch wearables you know really important part of this company's story now what stood out to you there Ben yeah so I would say again from a financial standpoint I would I would be watching very closely uh this segment category because it does seem that again Apple knows there's a lot of people with with very old airpods and very old Apple watches who again haven't upgraded and I think that we we may see a very strong upgrade cycle for airpods across the board obviously airpods for new redesign an option including with active noise cancelling you've got some of the hearing aid functions that I actually think is going to be very very interesting to a lot of people particularly in airpods Pro and just the new design of series 10 getting larger even a slightly larger display uh than Apple watch I think will be super compelling so I I would expect a much stronger uh then anticipated upgrade cycle for the category of uh of wearables for Apple what I saw product wise today all right we'll be watching those numbers when they do start to come in Ben bearin great to see you thanks so much for joining us thanks for having me anytime