Apple Polishes Its Core: Analyst Sees Strength In AI, UI And App Store

Apple Inc AAPL presented a substantive UI refresh and developer-focused artificial intelligence strategy at Monday’s Worldwide Developers Conference (WWDC ) 2025 on Monday, according to Bank of America Securities analyst Wamsi Mohan.

Mohan maintained a Buy rating on Apple with a price target of $235.

The rating reflects resilient earnings, strong capital returns, and optionality to monetize incremental avenues of growth, he explained.

Also Read: Apple’s WWDC: Analyst Sees AI Unveil, Siri Revamp And Alibaba Deal As Catalyst For iPhone Upgrade

Major Takeaways From WWDC, Per Mohan

Apple announced:

• A Foundation Models Framework will help developers embed Apple’s on-device LLMs directly into third-party apps, expanding integration with current Apple Intelligence features.
• The advantage (to both Apple and developers) is fast, low-latency inference, lower bandwidth use, and enhanced privacy.
• The framework is accessed through modern Swist syntax; only a few lines of code are needed to integrate capabilities within apps.
• “Liquid Glass” will be cohesive across iOS, iPadOS, macOS, watchOS, tvOS, and visionOS
• No more sequential versions of Apple OS; they will now be year-based names, with iOS 26 launching in Fall 2026.
• New productivity and communication features across their OS, including Call Screening and Hold Assist.
• Embedded live language translation across Phones, Facetime, and Messages, which supports bi-directional translation, i.e., two parties can speak in separate languages.

Despite the underwhelming event compared to prior years, Mohan noted that it affirms Apple’s privacy-centric take on AI. Apple will likely expand to larger on-device and cloud-based models over time while deliberately narrowing its AI stack offering.

As for the App Store, revenue grew by over 12% to $6.6 billion in the fiscal third quarter, outpacing download growth of over 4%, as per SensorTower data.

Apple estimated that the calendar 2024 U.S. app store ecosystem was around $406 billion while the App Store globally only contributed $31 billion in revenue to the company, Mohan said. In the U.S., Apple’s App Store revenue comes from a tiny group of apps (41% of calendar 2025 year-to-date revenue to Apple comes from the top 100 apps), per the analyst.

Recent Court Ruling

Mohan hasn’t foreseen significant changes in App Store activity or revenue since the recent U.S. ruling, enabling developers to steer consumers away from the App Store to alternative stores for purchases.

The ruling could be a long-term headwind to gaming revenue. The analyst said that app store revenue growth has outpaced downloads, and average dollars per download to Apple has doubled since 2020. He said the top 4 dollars per download are game apps, while the middle tier is games or other apps with many in-app purchase options. Subscription-only apps can be very sticky, although they only have a 15% commission (compared to 30% for regular purchases), but many have an off-app store purchase option, he reasoned.

AAPL Price Action: Apple stock is up 0.55% to $202.56 at last check Tuesday.

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