Apple 'Supercycle' Thesis Gains Traction on China AI Launch, New Leasing Program

A confluence of recent developments is bolstering the case for a significant, multi-year iPhone upgrade cycle, according to several Wall Street analysts. The thesis rests on three main pillars: the recent regulatory approval for Apple Intelligence in China, the launch of a new device leasing program, and an anticipated overhaul of the Siri virtual assistant.

China AI Approval Unlocks Key Market

A critical development is the recent registration of Apple Intelligence with China's cyberspace regulator, a move that makes the AI features available in Apple's largest growth market. The service will integrate local models from Baidu and Alibaba, addressing a key gap in Apple's global AI strategy.

This approval follows a 24.4% year-over-year surge in China iPhone shipments in the second quarter, a figure recorded even before the full AI rollout. The inclusion of over a billion potential users in the AI ecosystem is viewed by analysts as a structural catalyst for upgrades.

Leasing Program Aims to Accelerate Upgrades

Apple on July 28 launched Apple Upgrade, a new leasing program backed by Klarna with 24-month terms. The program is designed to shorten the consumer hardware replacement cycle, which currently averages between three and four years.

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Analysts at KB Securities expect the program could compress the replacement cycle to just two years. They project this structural shift could add 10 million incremental units annually, helping global iPhone shipments climb from a forecast of 240 million in 2025 to 260 million by 2027.

Analyst Outlook and Upcoming Earnings

These catalysts have prompted positive revisions from some analysts. HSBC recently upgraded Apple from Hold to Buy with a $366 price target, citing the potential of a more capable "agentic Siri" with visual intelligence and cross-app functionality. The bank raised its FY27-28 revenue forecasts by 7-9% and now projects iPhone sales to grow approximately 21% in fiscal 2026.

However, a bearish view persists elsewhere. Analysts at Barclays maintain an Underweight rating with a $230 target, citing potential margin pressure and regulatory uncertainty from ongoing antitrust talks. Investors will be closely watching Apple's earnings report on July 30 for management's guidance on iPhone demand and any early commentary on the new leasing program's adoption.