iPhone 17 Outsells On Speed, Not AI Hype: Analyst

Apple Inc. (NASDAQ:AAPL) is seeing strong momentum for its iPhone 17 Series, driven by loyal users upgrading to premium models, while broader adoption in China hints at expanding market reach.

Sustained demand for high-end devices and steady growth in wearables and services underscore the company’s resilience, even as shifting consumer priorities and global risks pose potential headwinds.

JPMorgan said its latest annual consumer survey indicates a strong upgrade cycle for the iPhone 17 Series, with existing iPhone users driving volumes. At the same time, interest from Android switchers is softer compared to last year.

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Analyst Samik Chatterjee noted that faster performance, improved aesthetics, and enhanced camera capabilities are the leading factors behind consumer interest, while AI features did not rank among the top five reasons for upgrading.

The survey also shows continued preference for high-end iPhones, although the iPhone 17 base model has gained significant traction relative to prior base models.

Overall, JPMorgan views the cycle as robust, driven by upgraders and premium model demand, and maintained its Overweight rating on Apple with a price forecast of $280.

The analyst said that the stronger intent to purchase a new iPhone in 2025 was evident, with 71% of respondents planning an upgrade, compared to 68% in 2024 and 63% in 2023.

Interest among U.S. consumers increased year-over-year, signalling momentum for the iPhone 17 Series, while demand in China eased slightly but remains robust at around 90%.

JPMorgan’s consumer survey shows that faster performance, camera capabilities, improved aesthetics, and 5G connectivity remain the top factors driving demand for new iPhones.

Consumers continue to place a premium on core hardware and user experience improvements, with performance ranking as the most important purchase driver.

Despite Apple’s push into artificial intelligence, AI features slipped further down the priority list, ranking seventh this year compared with sixth last year, underscoring that AI is not yet a key motivator for iPhone upgrades.

The analyst stated that Apple’s premium devices continue to experience momentum, with the iPhone 17 Pro Max emerging as the most popular choice among respondents at 33%, followed by the iPhone 17 Pro at 22% and the base iPhone 17 at 20%.

The firm noted that high-end models account for a greater share of demand within the iPhone 17 Series, representing 72% of intended purchases compared with 64% for the iPhone 16 Series last year. This shift toward a richer product mix was observed across both the U.S. and China, underscoring consumer preference for Apple’s top-tier models.

The survey indicates a stronger upgrade cycle for existing iPhone users in 2025, with 82% of respondents planning to purchase a new device compared with 79% last year. The uplift is more pronounced in the U.S., where 78% of upgraders expressed an intent to buy, compared to 73% in 2024, while sentiment in China improved modestly to 98% from 97%.

The analyst noted a softer intent among Android users to switch to iOS, with 57% of respondents planning to purchase a new iPhone in 2025, compared to 61% last year. The pullback was consistent across both the U.S. and China, suggesting that while Apple continues to attract switchers, momentum is more modest compared with the strength seen among existing iPhone upgraders.

The overall switching intent from Android users eased year-over-year, those who do plan to purchase an iPhone are gravitating toward premium devices. Among switchers, the iPhone 17 Pro Max was the most popular model at 29%, followed by the iPhone 17 Pro at 26% and the base iPhone 17 at 21%.

Preference for high-end models rose to 69% in the iPhone 17 Series compared with 62% in the iPhone 16 Series a year ago, signaling stronger demand for Apple’s top-tier devices within this group.

The survey outlines steady demand for smartwatches, with 56% of respondents planning to purchase one in 2025 compared with 54% a year earlier.

Apple Watches remain the clear leader, though aggregate share dipped modestly to about 87% from 91% in 2024. The decline was primarily driven by weaker traction in lower-end models, while demand for the Apple Watch Series 11 and Ultra 3 held relatively stable at 53% and 26%, respectively.

Price Action: AAPL shares were trading higher by 0.68% to $256.36 at last check Wednesday.

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