11:11 AM EDT, 05/29/2024 (MT Newswires) -- Apple ( AAPL ) is facing a strong multi-year iPhone upgrade cycle with the upcoming shift from regular smartphones to artificial intelligence-powered phones, or IntelliPhones, BofA Securities said in a note Wednesday.

The investment bank described the introduction of IntelliPhones as a "once in a decade upgrade event" that will drive the need for Apple ( AAPL ) to come up with the latest hardware to enable generative AI features.

"We view the upcoming AI enabled phones (IntelliPhones) to drive a multi-year upgrade cycle similar to the step function improvement driven by the introduction of smartphones," BofA said. "We expect the adoption curve of AI phones to be faster than the adoption of smartphones, 5G."

The new AI-backed phones will use "advanced machine learning and AI technologies to offer superior personal assistance, language processing, health monitoring, photography, security, battery management, [augmented reality/virtual reality] experiences and customizable user experiences," according to the note.

"As AI technology evolves the gap between IntelliPhones and traditional smartphones is likely to widen further by offering even more sophisticated and personalized functions driving the desire to upgrade," BofA said.

The investment firm reiterated Apple ( AAPL ) as a top pick and maintained its buy rating and $230 price target.

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