Apple AAPL.US delays Siri AI upgrade, UBS lowers iPhone sales growth forecast

Apple's highly anticipated AI upgrade for Siri has been delayed, and Citigroup is lowering its iPhone sales forecast for 2025. Citigroup analyst Atif Malik and his team now expect Apple to sell 232 million iPhones in the 2025 fiscal year, up 2% from the previous year, down from their previous estimate of 5%. The lower forecast comes after Apple delayed its promised AI upgrade for Siri last week, saying it expects to launch it "in the coming year." While Apple did not give a specific timeline, it had previously been expected to launch the new and optimized voice assistant alongside the iOS 18.4 software update in either April or May. Analysts had said that a more powerful Siri with "screen awareness, personal context, and deep app integration" could have been a driver for iPhone sales this year. Apple said the new Siri would be able to use user information to answer questions and perform actions across various apps. Citigroup is not excited about the delay, and even removed Apple from its list of positive catalysts. Malik warned that without AI, Apple may struggle to push iPhone upgrades, especially given that the iPhone remains Apple's biggest revenue source. "Given the delayed highly anticipated major Siri update, we believe Apple will miss out on accelerating the (user) upgrade cycle this year," Malik wrote. However, Citigroup is maintaining a "buy" rating on Apple stock, with a target price of $275, unchanged from its previous target, which is above the consensus target of $255 compiled by Visible Alpha. That means Apple's stock could rise 20%. This year, Apple's stock has fallen 9%. They noted, in part, "progress in launching Apple smartphones in China," where Apple has yet to launch its smartphones. Apple has touted the Apple Smart as a record driver for iPhone upgrades, and the new iPhone 16 will perform better in markets where the service is available. The iPhone accounts for the largest portion of Apple's revenue. According to FactSet, Apple's iPhone sales fell 4.4% from the previous year in the fiscal year ending September 2024. As of writing, Apple's stock fell 0.88% overnight on Monday to $225.48.