11:45 AM EDT, 06/12/2024 (MT Newswires) -- Apple's ( AAPL ) launch of Intelliphones using Apple Intelligence will drive a significant upgrade cycle as replacement cycles will shrink and compelling features will result in higher migration from Android to the Apple ( AAPL ) ecosystem, BofA Securities said in a note Wednesday.

The firm said that the consensus estimates for iPhone units in 2025 and 2026 are "too low" and do not account for "significantly increased switching activity."

A larger iPhone installed base can lead to higher consumption of services and additional device sales, especially with faster growth in the rest of the world driven by emerging markets, BofA added.

Apple ( AAPL ) has room for further penetration of services in the current installed base and expansion in secondary markets will initially generate lower services revenue due to price-conscious consumers but that will increase over time, according to the note.

The firm said Apple ( AAPL ) can profit from artificial intelligence by connecting various large language models with its installed base users and gain from increased prices on both its hardware and services.

BofA reiterated its buy rating on Apple's ( AAPL ) stock and kept the price objective at $230.

Shares of Apple ( AAPL ) were up 4.5% in recent trading.

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