Apple has 18 months to make progress on its AI platform

Apple is entering a pivotal phase. Its proprietary AI platform, Apple Intelligence, is expected to be market-ready by the end of 2026. Analysts at investment firm TD Cowen give the company another 18 months to achieve this. During this period, Apple is expected to make progress in artificial intelligence while also introducing new devices—including a foldable iPhone. Business development will remain stable, but without major leaps. The focus is on long-term expansion rather than short-term hype.

The Apple name has stood for thoughtful innovation for decades, but the company is treading cautiously when it comes to artificial intelligence. While competitors like Google are forging ahead with AI features in new devices, Apple is taking its time. TD Cowen doesn't see this as a lag, but rather as a strategy: Apple has until the end of 2026 to convincingly integrate Apple Intelligence into its product portfolio. During this phase, the focus will be not only on AI development, but also on new product categories like foldables and supply chain optimization. Despite cautious expectations, analysts remain optimistic—including regarding the share price.

Apple Intelligence comes later than expected

TD Cowen had predicted Apple would experience strong growth through Apple Intelligence in 2024. Analysts have since revised this assessment. The implementation of the AI platform will be delayed, and the hoped-for boost for the iPhone 16 has failed to materialize. No major progress is expected for the upcoming iPhone 17 either. Instead, TD Cowen sees Apple under pressure, as Google is launching its Pixel 10 with comprehensive AI features as early as August 20, 2025. Pressure is mounting to make Apple competitive in artificial intelligence. The 18-month deadline is expected to be sufficient to make Apple Intelligence a real selling point.

Foldables: iPhone Fold and possibly iPad Fold planned

According to TD Cowen, Apple is working on new form factors in parallel with AI development. The iPhone 18 Fold is expected for September 2026. Production is expected to be between 7 and 10 million units. Technically, a model with a single hinge is expected, although the exact display size has not yet been determined. A foldable iPad is also not off the table. Contrary to some reports, analysts believe that Apple is still working on an iPad Fold. There is no concrete confirmation, but internally, sales of 5 to 6 million devices are expected. This would give Apple direct entry into a market previously dominated by Samsung and a few Chinese manufacturers.

iPhone production increases – but for tactical reasons

To respond to possible new US tariffs on semiconductors, Apple ramped up iPhone production in the second quarter of 2025. TD Cowen estimates that 48 million devices were built – five million more than originally expected. This does not reflect increased demand, but rather an advance of orders to hedge against the expected 25 percent import tariffs. For the September quarter, TD Cowen expects 54 million iPhones instead of 50 million. However, for the full year, the figure remains at 223 million devices. This is an increase of 4 percent over the previous year. Compared to a decline of 3 percent in the previous calendar year, this is positive, but not a significant jump. Declining sales in China and the lack of impact of the AI strategy are particularly slowing growth.

Production relocation to India falls short of expectations

Apple had planned to produce over 50 million iPhones in India. However, according to TD Cowen, this could reach only 40 million by the end of the year. The figures come from supply chain sources, which also confirm that total orders remain largely stable. In comparison, Samsung has increased its orders, while Xiaomi and Oppo have reduced theirs – each in response to changing demand.

Other Apple products with slight declines and later recovery

For the June quarter of 2025, TD Cowen expects a low-single-digit decline in iPads, Macs, and wearables. The following September quarter is expected to see a slight upturn, with growth in the mid-single-digit range. Overall, the figures are solid but not spectacular. Interest in the Apple Vision Pro remains limited. Instead of the originally planned 350,000 devices, only around 60,000 are to be produced. The reasons are the high price and the lack of concrete use cases for the mass market. This also shows that Apple, while innovative, has not yet been able to tap into the broad user base for this product category.

Services as a stable pillar in Apple's business

While hardware sales fluctuate, services remain Apple's most stable revenue generator. TD Cowen expects growth of over 11 percent in the current quarter, and this trend is expected to continue through the end of 2025. In a market environment characterized by cautious consumers and reduced budgets, this is an important factor for stability.

Apple under pressure: The next 18 months will be decisive

Apple faces a clearly defined challenge: Apple Intelligence must deliver convincing results by the end of 2026. During this time, Apple also aims to catch up technologically, for example with foldable iPhones and possibly an iPad Fold. Pressure is mounting from competitors, particularly Google, which is pushing ahead with new AI features. At the same time, Apple is focusing on services as a revenue stream and strategically hedging iPhone production against potential tariffs. The overall picture is stable, but not euphoric. TD Cowen maintains its price target of $275 and continues to recommend buying Apple shares. JP Morgan and Morgan Stanley also share this assessment. Apple remains innovative – but the market is waiting for clear momentum. The next 18 months will show whether Apple lives up to these expectations. (Image: Shutterstock / Primakov)

Disclaimer: No recommendation for investments

This article does not constitute financial or investment advice. The information contained herein is for journalistic and informational purposes only. Please conduct your own research or consult a financial advisor before making any investment decisions.