[Real Estate Tech] "The Real AI Phone is Coming" On-Device AI Stocks 'Hot Pick'

Increased Expectations for Mobile AI Following Apple's AI Strategy Announcement
Capital Market Experts Focus on On-Device AI Stocks

'The real AI phone is coming.'

Apple's artificial intelligence (AI) strategy, which global investors have been paying close attention to, has been announced. Apple unveiled its new AI system, Apple Intelligence, at the annual Worldwide Developers Conference (WWDC). Apple is officially introducing AI features into the operating systems that run iPhones and iPads. Through a partnership with OpenAI, the voice assistant 'Siri' will be integrated with ChatGPT. Apple Intelligence focuses more on AI services that are closer to the daily lives of Japanese users rather than the specialized functions of existing generative AI. Investors are particularly noting that the era of the 'AI phone' has officially begun. A capital market insider explained, "Apple's 'AI phone' is expected to amplify the disruptive power brought by ChatGPT," adding, "From an investment perspective, a new market of mobile AI and on-device AI, which goes beyond generative AI, has opened."

On-Device AI... Opening a New Window for Investment

The Apple iPhone is considered the top device to spread the on-device AI craze. On-device AI refers to collecting information and performing computations through AI embedded within the device itself, without routing through servers. It is attracting attention as next-generation technology because it is not limited by network conditions, offers high security, and processes information quickly. Apple Intelligence understands language, images, behavior, and even personal context. It helps summarize text, generate images, and search for the most relevant data when users need it. Apple explained that these AI features are basically provided in an on-device form or processed in a private cloud with no information leakage.

The investment industry expects Apple's AI phone to reignite the somewhat lukewarm smartphone market. It is anticipated that AI will deeply penetrate daily life and explosively grow related markets. Besides Apple, companies producing semiconductor chips essential for implementing AI smartphones, companies with AI semiconductor design technology, and companies related to materials, components, and equipment used in AI semiconductor manufacturing processes are also seeing their values rise. The advancement of services is expected to create another major leap and investment opportunity not only for Apple but also for related technology and materials, components, and equipment companies.

To use Apple's new AI features on iPads or Macs, devices must be equipped with an M1 chip or higher. For iPhones, the features will be available starting from the iPhone 15 Pro and Pro Max released in the second half of last year and the iPhone 16 series scheduled for release this year. For mobile AI features to provide real satisfaction to consumers, service advancement must be achieved in both hardware and software.

Capital market experts forecast that the AI boom will continue throughout the year. This is because expectations related to the blooming on-device AI market and AI investments by CSPs (Cloud Service Providers) are linked to future competitiveness. The securities industry sees on-device AI leading mega trends in the future. The AI craze that started with ChatGPT has improved HBM memory performance in the semiconductor market and is expected to spread to on-device AI. This AI trend is expanding to PCs, smartphones, and home appliances. Apple CEO Tim Cook stated during the earnings announcement on the 2nd of last month, "Generative artificial intelligence will be a very important opportunity for Apple's products overall in the future." Following this, expectations for Apple's AI services grew, and Apple’s stock price, which was below $170 in early May, surged sharply, reaching an all-time high during trading on the 11th (local time). Apple closed at $207.15 per share on the New York Stock Exchange that day, up 7.26% from the previous trading day. It was the first time Apple’s stock price surpassed $200, reaching an intraday high of $207.16. The stock surge pushed Apple’s market capitalization beyond $3.18 trillion, overtaking Nvidia to reclaim the second spot in market capitalization.

The iPhone 16, to be unveiled in the second half of this year, is expected to be the first AI iPhone in 17 years since the original iPhone launch in 2007, enabling simultaneous access to on-device and AI cloud AI, which is anticipated to stimulate future iPhone replacement demand. In particular, users of the iPhone 12 and iPhone 13, which recorded the highest sales over the past five years, are expected to start replacing their devices with the iPhone 16 this year, continuing through the iPhone 17, leading to a large-scale replacement demand and entering the iPhone big cycle. Dongwon Kim, a researcher at KB Securities, said, "This year’s iPhone sales are expected to reach the highest level in three years (235 million units), and strong sales are likely to continue next year." The unveiling of Apple’s AI strategy is expected to directly benefit Samsung Electronics, LG Electronics, and LG Innotek. Companies such as Jahwa Electronics and BH are also mentioned as beneficiaries.

This content was produced with the assistance of AI translation services.