Tariffs not stopping Americans from wanting new iPhones with Apple Intelligence

AppleInsider

Investment firm Morgan Stanley's latest US buyer survey shows record numbers intend to upgrade their iPhone -- and that they want Apple Intelligence, especially if they can also get a thin or foldable model.

Apple Intelligence is coming this fall

Morgan Stanley has been rapidly dropping its price target for Apple, starting 2025 at $275, then dropping to $252 in March because of fears of lower than expected iPhone upgrades. Then the company expected Apple to drop to between $200 and $210 because of tariffs, which were then so much worse than anticipated, that it predicted a drop to as little as $172.

So even while it maintained its own price target at $220, Morgan Stanley can't have been expecting a great response from buyers in its latest survey. But according to an investor note seen by AppleInsider, that's what it got.

From a survey of 3,300 US consumers, Morgan Stanley reports:

• 51% of current users intend to upgrade in the next 12 months


• 40% are strongly interested in foldable or thin iPhones


• 80% of US users with Apple Intelligence have used it in the last six months


• 42% believe it's very or extremely important to have Apple Intelligence

That figure of 51% of current iPhone users intending to upgrade is an all-time high record for Morgan Stanley's surveys. While the survey presumably doesn't specify models, upgrading within the next year means users intending to buy new iPhones from any of the iPhone 16 range, the iPhone 17 range, or the expected iPhone 17e in February or March 2026.

Then 40% of US iPhone users said that they were "extremely interested" in foldable or thin iPhones.

The 42% of current users who think Apple Intelligence is very or extremely important, specifically think so for their next iPhone. Of the users intending to upgrade in the next 12 months, that figure rises to 54%.

Apple Intelligence is a hit

While acknowledging the criticisms over Apple Intelligence, Morgan Stanley also reports that users are willing to put their money where their mouths are. Its survey said that if Apple monetized Apple Intelligence, on the average, users would be willing to pay up to $9.11 per month for it.

That's significant both because of how it's risen since the firm's September 2024 survey that said $8.17 per month, and for the breakdown of that average. Without detailing figures, Morgan Stanley says the average has risen because more users are willing to pay between $10 and $15 per month, and fewer users don't want to pay at all.

Morgan Stanley says it does not expect Apple to start charging for Apple Intelligence yet, but it believes a paywall will come. Its analysts now predict that monetizing Apple Intelligence could earn Apple tens of billions of dollars annually, at some point.

In the shorter term, Morgan Stanley expects an iPhone slim in September 2025, and says an iPhone Fold is increasingly likely for 2026. It expects that such form factor changes could bring Apple growth that is similar to what it had during the last major form redesigns with the iPhone X and iPhone 12.

That folding iPhone, though, is expected to cost $2000 or more. It's not clear if Morgan Stanley has incorporated this cost point into their survey or estimates.

Morgan Stanley does also note, though, that Apple is facing hurdles such as the unpredictability of Trump's "reciprocal" tariffs. There is also the issue of weakening demand for the iPhone in China.



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daalseth

I don’t know what MS is smoking but those numbers make absolutely no sense to me. I’ve seen a lot of surveys and analyst’s reports in the last few months and consistently Foldable’s have been a tiny niche product, and AI is WAY down the list of important items. 

ssfe11

MS has a great track record too. Probably the best out there with surveys and charts etc. 

retrogusto

DAalseth said:

I don’t know what MS is smoking but those numbers make absolutely no sense to me. I’ve seen a lot of surveys and analyst’s reports in the last few months and consistently Foldable’s have been a tiny niche product, and AI is WAY down the list of important items. 

The fact that they grouped foldables together with thinner phones could be muddying the waters. I have no interest in foldables, but the way the phones keep getting thicker and heavier is probably the biggest reason why I’ve been hesitant to buy a new phone in recent years—none of the new features matter to me as much as the compactness, so for my purposes the phones get a little worse with each new model, or at best a different set of compromises.

The responses for Apple Intelligence are more surprising to me, but I’m glad some users are finding value there. 

applezulu

retrogusto said:

DAalseth said:

I don’t know what MS is smoking but those numbers make absolutely no sense to me. I’ve seen a lot of surveys and analyst’s reports in the last few months and consistently Foldable’s have been a tiny niche product, and AI is WAY down the list of important items. 

The fact that they grouped foldables together with thinner phones could be muddying the waters. I have no interest in foldables, but the way the phones keep getting thicker and heavier is probably the biggest reason why I’ve been hesitant to buy a new phone in recent years—none of the new features matter to me as much as the compactness, so for my purposes the phones get a little worse with each new model, or at best a different set of compromises.

The responses for Apple Intelligence are more surprising to me, but I’m glad some users are finding value there. 

Without seeing the actual Morgan Stanley report, it's hard to know for sure what any of this actually means.

Most importantly,  the text of the article here does not support the headline at all.  It's pretty unjustified to derive the headline "Tariffs not stopping Americans from wanting new iPhones with Apple Intelligence" from a survey that was likely conducted before the announcement of tariffs on China and that also doesn't appear to mention tariffs in the actual survey results. There is certainly no indication in the article here that Morgan Stanley's survey or investor note referenced tariffs. Also, the article does mention that the previous Morgan Stanley survey on this subject was over six months ago in September. At that interval it seems highly doubtful much or any of the data for the current survey was collected after Trump's "Liberation Day" announcement less than three weeks ago. Put all that together, and there's nothing at all to suggest that survey respondents were even thinking about tariffs when they answered some questions about iPhones. 

edited April 22

macgui

Referring only to the headline and not the article's content, wait until it's time to pay for that shiny new phone. Then we'll see how many people want it.

Without knowing what kind of hit the price will take, Now With Extra Tariffs! will be dealbreaker for many. When it's time to plunk down the plastic or Ti, it gets really real. I expect it will do fine just that more than a few minds will change if the tag goes north.

entropys

Half would subscribe to Apple intelligence? What a laugh. Did they interview Tim Apple and his sock puppet?

johndineu

Tim Trump and his buddies want us to believe we will buy 2 K phones. We call it wishful thinking. 

daalseth

JohnDinEU said:

Tim Trump and his buddies want us to believe we will buy 2 K phones. We call it wishful thinking. 

Honestly, I think bringing out new devices at even higher prices and, as I have a feeling will happen, bumping up the price of existing products is not going to be a winning strategy. In just three months this administration has already done severe damage to the economy. The tariffs are starting to bite. Unemployment is climbing. The bond market is getting more expensive, the dollar is down, the markets are down. By fall when Apple is rolling out their new products I just don’t think most buyers are going to be in a position to grab a shiny new folding AI enabled gadget. 

retrogusto

AppleZulu said:

retrogusto said:

DAalseth said:

I don’t know what MS is smoking but those numbers make absolutely no sense to me. I’ve seen a lot of surveys and analyst’s reports in the last few months and consistently Foldable’s have been a tiny niche product, and AI is WAY down the list of important items. 

The fact that they grouped foldables together with thinner phones could be muddying the waters. I have no interest in foldables, but the way the phones keep getting thicker and heavier is probably the biggest reason why I’ve been hesitant to buy a new phone in recent years—none of the new features matter to me as much as the compactness, so for my purposes the phones get a little worse with each new model, or at best a different set of compromises.

The responses for Apple Intelligence are more surprising to me, but I’m glad some users are finding value there. 

Without seeing the actual Morgan Stanley report, it's hard to know for sure what any of this actually means.

Most importantly,  the text of the article here does not support the headline at all.  It's pretty unjustified to derive the headline "Tariffs not stopping Americans from wanting new iPhones with Apple Intelligence" from a survey that was likely conducted before the announcement of tariffs on China and that also doesn't appear to mention tariffs in the actual survey results. There is certainly no indication in the article here that Morgan Stanley's survey or investor note referenced tariffs. Also, the article does mention that the previous Morgan Stanley survey on this subject was over six months ago in September. At that interval it seems highly doubtful much or any of the data for the current survey was collected after Trump's "Liberation Day" announcement less than three weeks ago. Put all that together, and there's nothing at all to suggest that survey respondents were even thinking about tariffs when they answered some questions about iPhones. 

True. The average consumer is only going to care about tariffs to the degree that they impact prices, and even now I imagine most consumers are assuming that new iPhones will cost roughly the same as current models. A sustained trade war would be a disaster for the US economy (among others), and September is still several months away, so it’s not such an unreasonable expectation. The headline is also kind of questionable in that the literal meaning is too obvious to constitute news—tariffs don’t stop people from wanting anything, but they might stop people from buying things, which is a critical distinction.

charlesn

"51% of current users intend to upgrade in the next year." 

Oh, yeah, very typical iPhone upgrade cycle, half of all current iPhone users get a new one annually.

"40% are strongly interested in foldable or thin iPhones."

Definitely. And we know this because about 40% of Samsung and Google buyers are choosing their folding phones. We also know about the desire for thinner phones as proven by Apple canceling its thinnest iPhone, the SE 3, and replacing it with the thicker 16e. 

This, cough, "data" is about as laughable as it gets. You might even get the impression that Morgan Stanley had its finger--no, make that its hand--on the scale here, but I'm sure that couldn't possibly be the case! 

ofer

AppleZulu said:

retrogusto said:

DAalseth said:

I don’t know what MS is smoking but those numbers make absolutely no sense to me. I’ve seen a lot of surveys and analyst’s reports in the last few months and consistently Foldable’s have been a tiny niche product, and AI is WAY down the list of important items. 

The fact that they grouped foldables together with thinner phones could be muddying the waters. I have no interest in foldables, but the way the phones keep getting thicker and heavier is probably the biggest reason why I’ve been hesitant to buy a new phone in recent years—none of the new features matter to me as much as the compactness, so for my purposes the phones get a little worse with each new model, or at best a different set of compromises.

The responses for Apple Intelligence are more surprising to me, but I’m glad some users are finding value there. 

Without seeing the actual Morgan Stanley report, it's hard to know for sure what any of this actually means.

Most importantly,  the text of the article here does not support the headline at all.  It's pretty unjustified to derive the headline "Tariffs not stopping Americans from wanting new iPhones with Apple Intelligence" from a survey that was likely conducted before the announcement of tariffs on China and that also doesn't appear to mention tariffs in the actual survey results. There is certainly no indication in the article here that Morgan Stanley's survey or investor note referenced tariffs. Also, the article does mention that the previous Morgan Stanley survey on this subject was over six months ago in September. At that interval it seems highly doubtful much or any of the data for the current survey was collected after Trump's "Liberation Day" announcement less than three weeks ago. Put all that together, and there's nothing at all to suggest that survey respondents were even thinking about tariffs when they answered some questions about iPhones. 

Agreed! The survey had nothing to do with tariffs. 

sitime

AppleZulu said:

retrogusto said:

DAalseth said:

I don’t know what MS is smoking but those numbers make absolutely no sense to me. I’ve seen a lot of surveys and analyst’s reports in the last few months and consistently Foldable’s have been a tiny niche product, and AI is WAY down the list of important items. 

The fact that they grouped foldables together with thinner phones could be muddying the waters. I have no interest in foldables, but the way the phones keep getting thicker and heavier is probably the biggest reason why I’ve been hesitant to buy a new phone in recent years—none of the new features matter to me as much as the compactness, so for my purposes the phones get a little worse with each new model, or at best a different set of compromises.

The responses for Apple Intelligence are more surprising to me, but I’m glad some users are finding value there. 

Without seeing the actual Morgan Stanley report, it's hard to know for sure what any of this actually means.

Most importantly,  the text of the article here does not support the headline at all.  It's pretty unjustified to derive the headline "Tariffs not stopping Americans from wanting new iPhones with Apple Intelligence" from a survey that was likely conducted before the announcement of tariffs on China and that also doesn't appear to mention tariffs in the actual survey results. There is certainly no indication in the article here that Morgan Stanley's survey or investor note referenced tariffs. Also, the article does mention that the previous Morgan Stanley survey on this subject was over six months ago in September. At that interval it seems highly doubtful much or any of the data for the current survey was collected after Trump's "Liberation Day" announcement less than three weeks ago. Put all that together, and there's nothing at all to suggest that survey respondents were even thinking about tariffs when they answered some questions about iPhones. 

Trump’s tariffs were announced well before “Liberation Day”. Trump’s tariffs were announced well before the election. I know many people don’t take Trump seriously when he says things, but he made it perfectly-clear in the run up to the election that tariffs were coming if he were elected. Tariffs were one of the few policy positions that he did make 100% perfectly-clear.

I’m old enough to remember all the way back to… early-December 2024… when people were already pulling-forward certain big ticket purchases in anticipation of Trump’s tariffs.

Heck, arguably Trump’s tariffs were announced decades ago when Trump was talking about tariffs on Chinese goods back in the 1980s.