Apple shares reached new record highs as the tech giant this week unveiled its long-awaited push into AI at its annual developer conference.

The debut at the Worldwide Developers Conference in Cupertino, California is "a moment we've been working toward for a long time", according to Apple's Senior Vice President Craig Federighi.

Despite concerns that Apple Intelligence is to be incorporated into its existing iPhone Pro 15 and not confined to the yet-to-be released iPhone 16, analysts predict a "supercycle" of new iPhones starting later this year.

'New heights' 

The long awaited release of Apple Intelligence has reinvigorated investor confidence in the tech giant, after fears that its flagging push into the rapidly expanding AI space was leaving it behind rivals Nvidia, Microsoft and Google parent Alphabet. 

Apple chief executive Tim Cook said the launch of Apple Intelligence will take his company "to new heights." 

The platform will boost its existing voice recognition model Siri and also allow access to Open AI's ChatGPT chatbot at no extra cost, with more features to be added over time. The offer will allow users to create text, images and other content on command. OpenAI boss Sam Altman said he is "very happy to be partnering with Apple."

By midday trading in New York on Tuesday, Apple shares jumped 5 percent to $203 each, after a lackluster start. That's higher than the firm's previous record in early December.

When Apple Intelligence is launched this autumn, industry watchers are predicting the biggest upgrade cycle in iPhones since the release of the 5G enabled iPhone 12 in 2020.

"We estimate fifteen percent plus of the Apple installed base will switch to iPhone 16," said Wedbush Securities analyst Dan Ives, referencing the 270 million devices that have not been upgraded in four years.

READ MORE

Exclusive: Zhang Zhilei joy at winning 'life and death battle' with Deontay Wilder

Trainspotting reaches a new online generation of enthusiasts

Austria to predict wildfires by tracking runners

'Immediate leader'

Apple has seen a first quarter revenue decline this year of over four percent and is under pressure to promote new growth. 

Experts believe the desire for larger display screens and more powerful cameras to take full advantage of AI capability could boost sales. 

"That action in part will make Apple an immediate leader in consumer AI," predicted Martin Yang of investment bankers Oppenheimer & Co.

But others warn that more volatility in Apple's share price is on the way, not least with the costs of the partnership with OpenAI dragging on near term revenues. They compare Apple's recent results unfavorably to those of rival Nvidia which has seen stock rise 771% since the start of November. 

"The lack of a game changing AI software suite is likely a negative for iPhone demand as well as investor sentiment," UBS warned in an investors note.

Subscribe to Storyboard: A weekly newsletter bringing you the best of CGTN every Friday