Apple has 18 months to make its Apple Intelligence platform a standout feature, according to a new report from investment firm TD Cowen. The firm believes Apple must deliver major improvements by the end of 2026 to stay competitive, especially with rivals like Google gearing up to launch AI-powered Pixel 10 phones in August.
Limited Growth, Pressing Challenges
Despite solid iPhone production—48 million units in the June 2025 quarter alone—Apple’s overall sales growth remains modest. The company’s total iPhone shipments are projected to hit 223 million for 2025, marking a 4% year-over-year increase. However, analysts point out that this growth is dampened by declining sales in China and a still-developing AI strategy.
Tariff policies also weigh heavily. In anticipation of a 25% semiconductor tariff, Apple increased production to offset costs. Meanwhile, supply chain data suggests Apple may fall short of its 50 million iPhone production target in India, with actual figures closer to 40 million.
Foldables and Vision Pro in Focus
TD Cowen predicts Apple will launch a foldable iPhone in 2026, estimating sales between 7 and 10 million units. They also anticipate an iPad Fold, despite mixed signals from other reports. Both devices could help Apple stay ahead in a market where Samsung and other competitors are scaling up innovation.
Apple Vision Pro is another key product, though early demand has been tepid. Apple reportedly produced only 60,000 units this year, far below initial forecasts of 350,000. High prices and limited consumer use cases are partly to blame.
Services Stay Strong
Amid hardware challenges, Apple’s services segment remains a bright spot. Analysts expect more than 11% growth this quarter, with steady performance through 2025.
Looking Ahead
While TD Cowen doesn’t predict explosive growth in the near term, it maintains a target stock price of $275. The message is clear: Apple has time—but not forever—to make Apple Intelligence truly matter.
