Apple's AI features fail to spark a wave of upgrades, UBS survey shows users' willingness to upgrade continues to decline.

Apple Intelligence has failed to become the catalyst for the upgrade super cycle that Wall Street had expected, and this narrative continues to falter.

According to the latest UBS survey, the proportion of respondents who said they would upgrade their phones early due to Apple Intelligence features has dropped by about 500 basis points from six months ago to approximately 24%, while the proportion saying the feature has "no influence" on their purchase decision has risen by about 300 basis points to approximately 31%. This means the actual driving force of Apple's AI features on consumers' upgrade behavior is weakening, not strengthening.

Nevertheless, there are still some positive signals in the survey: iPhone purchase intention in the US market over the next 12 months has increased by about 300 basis points year-on-year to approximately 20%, with more significant increases in the UK and Germany; at the same time, consumer interest in Apple-branded foldable phones remains relatively strong, viewed as a potential demand support.

UBS maintains its 12-month target price for Apple at $296, and Apple's stock price has now returned above $300.

Impact of Apple Intelligence on Upgrade Decisions Continues to Weaken

UBS analyst David Vogt recently cited the latest survey results from its Evidence Lab, pointing out that Apple Intelligence has not yet ignited the long-awaited iPhone upgrade super cycle. The survey covered over 7,500 smartphone users across five major markets.

The results show that the proportion of respondents who said they would upgrade their devices early due to Apple Intelligence features is about 24%, down by about 500 basis points from six months ago; while the proportion of respondents who said the feature has no impact on their purchase decision rose to about 31%, up by about 300 basis points from six months ago.

This data creates a clear disconnect from Wall Street's previous expectations. Previously, many analysts positioned Apple's AI features as the core driver for a new iPhone upgrade super cycle, using this to support optimistic forecasts for Apple's hardware sales. Currently, this logic has not been validated at the consumer behavior level.

Against the backdrop of weak overall upgrade willingness, there is a clear divergence across different markets.

The survey shows that iPhone purchase intention in the US market over the next 12 months has increased by about 300 basis points year-on-year to approximately 20%, with stronger performance in the UK and Germany, rising by about 600 basis points and 400 basis points respectively.

iPhone purchase intention in the Chinese market over the next 12 months has decreased by about 100 basis points year-on-year to approximately 15%. Combined with potential price increase pressure, analyst David Vogt lists this as one of the main factors constraining further expansion of Apple's valuation.

Foldable iPhone Becomes Potential Demand Highlight

As the driving force of Apple Intelligence falls short of expectations, the upcoming foldable iPhone is seen as another potential demand driver.

The survey shows that although the "net interest" in the overall foldable phone market has declined by about 600 basis points from six months ago to negative 8%, consumers' preference premium for Apple-branded foldable products has significantly expanded—Apple's foldable "net interest" lead over ordinary foldable phones has widened by about 600 basis points from six months ago to approximately 48%.

David Vogt stated that the directional positivity of market sentiment toward Apple's foldable products helps support iPhone demand, especially against the backdrop where new AI features expected to be released at Apple's Worldwide Developers Conference (WWDC26) are unlikely to become a substantial demand driver.

He estimates that the foldable iPhone could contribute up to 5 million units in initial sales, representing about 2% upside to his existing forecast.

In terms of shipment forecasts, David Vogt maintains his iPhone shipment estimate for Apple's fiscal year 2026 at 261.6 million units, up about 15.7% year-on-year, primarily benefiting from strong demand for the iPhone 17 and some pull-forward of demand ahead of expected price increases.

UBS maintains its 12-month target price for Apple at $296, based on a 30x P/E valuation on its calendar 2027 EPS estimate of $9.86.

David Vogt notes that the current valuation already partially reflects recent iPhone demand improvement expectations and some AI option value, but uncertainties in the product roadmap and potential price increase risks constrain further expansion of the valuation multiple.

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