Minsheng Securities: Apple Inc. (AAPL.US) new product launch Apple Intelligence to be launched soon.

Minsheng Securities released a research report stating that Apple Inc. (AAPL.US) has officially released a new iPhone, and has increased investment in AI on the device side. Apple Intelligence, as the core of personalized AI system, is expected to drive a new round of phone upgrades this year and next. In terms of hardware, it is expected that next year, the iPhone's heat dissipation solution and soft-hard board structure technology will undergo significant upgrades, benefiting related industry chain companies. With the continuous iteration and upgrade of AI on the device side, it is expected that Apple Inc. will focus on heat dissipation in design innovations next year, leading to a revolutionary change in the iPhone's heat dissipation solution. Additionally, upgrades in computation and storage will require higher demands on internal space of phones, while the trend of terminals towards miniaturization and diversified functions remains unchanged. The team predicts that Apple Inc.'s PCB will undergo numerous upgrades in materials and technology next year. Event: On September 10, 2024, at 1:00 am Beijing time, Apple Inc. held its autumn new product launch event, releasing the new iPhone 16 series, iWatch Series 10, iWatch Ultra2, and the new AirPods series (AirPods 4/AirPods Pro 2/AirPods Max 2). The release of the new Apple Inc. iPhone 16 and Apple Intelligence is imminent. 1) Apple Inc. released new iPhone 16, iWatch, and AirPods series: - In terms of iPhone, the prices for the 16/16 Plus/16 Pro/16 Pro Max models are $799/$899/$999/$1199 respectively. The chips have been upgraded to A18, with ultra-wide angle and fusion main cameras capable of shooting spatial videos for Vision Pro; the Pro series features a titanium metal appearance, updates to 3 cameras, and improved shooting experience. - For Apple Watch, the Apple Watch Series 10 and Watch Ultra2 were released, with prices starting at $399/$799. They are lightweight with large displays; the aluminum and polished titanium versions are 10%/20% lighter than their predecessors. - AirPods received updates across the series, with AirPods 4 priced at $129 ($179 with active noise cancelling), AirPods Pro 2 priced at $249, featuring 3 new functions: active noise cancellation, hearing protection, and hearing aid functions; the new color AirPods Max are priced at $549. 2) Subsequent timelines: - iPhone 16 series pre-orders start on September 13 at 8:00 pm, with official release on September 20. - Apple Intelligence will be used with software updates; the English version will debut in the US in October, expanding to Australia/Canada/New Zealand/South Africa/UK in December, and Chinese/French/Japanese/Spanish versions will be introduced in 25 years. AI driving hardware upgrades, heat dissipation and PCB as main focus points. Apple Intelligence, as the core of personalized AI system, requires high computing power chips and memory to accommodate large models. Apple Inc. custom designed and developed the A18 chip for the iPhone 16, with the latest 6-core CPU (2 performance + 4 efficiency cores) and desktop-level GPU architecture (new 5-core GPU), significantly improving efficiency compared to previous generations. The iPhone 16 has upgraded its structure and materials for heat dissipation (upgrading the motherboard and optimizing the chip surrounding architecture structurally; using 100% recycled aluminum metal heat dissipation substructure), along with the continuous iteration and upgrade of AI on the device side, Minsheng Securities predicts that Apple Inc. will focus on heat dissipation for design innovations next year, leading to a revolutionary change in the iPhone's heat dissipation solution. Additionally, upgrades in computation and storage will require higher demands on internal space of phones, while the trend of terminals towards miniaturization and diversified functions remains unchanged, with Minsheng Securities predicting that Apple Inc.'s PCB in materials and technology will undergo numerous upgrades next year. Investment recommendation: Apple Inc. has officially released the new iPhone, and has increased investment in AI on the device side. Apple Intelligence, as the core of personalized AI system, is expected to drive a new round of phone upgrades this year and next. In addition, Minsheng Securities predicts that next year, the iPhone's heat dissipation solution and soft-hard board structure technology will undergo significant upgrades, benefiting related industry chain companies. It is recommended to pay attention to: Luxshare Precision Industry (002475.SZ), Lingyi Itech (002600.SZ), Lens Technology (300433.SZ), Avary Holding (002938.SZ), Goertek Inc. (002241.SZ), Zhejiang Crystal-optech (002273.SZ). Risk warning: iPhone sales of Apple Inc. may fall below expectations, AI innovation may fall below expectations, exchange rate fluctuations.