Apple stock: Citi says all eyes are on iOS18.2 release in December

Investing.com — Citi analysts are keeping a close watch on Apple (NASDAQ:AAPL)’s upcoming iOS 18.2 release, set to debut in December, viewing it as a critical factor for the company’s iPhone replacement cycle in the coming quarters.

According to Citi, the “rollout of iOS 18.2 in December will be an important determinant for the pace of iPhone replacement.”

The new operating system, expected to launch on December 9 according to a recent report from MacRumors, is expected to include expanded Apple Intelligence features, marking a shift in Apple’s approach to product updates.

Citi notes that the staggered rollout of these features makes the iPhone 16/17 refresh cycles different from previous ones.

They explain that while iOS 18.1 was released with limited generative AI features in October, the full suite of Apple Intelligence won’t reach the European Union until April 2025, with no clear timeline yet for China.

Apple’s generative AI ambitions extend further. Citi references a Bloomberg report indicating that a more conversational “LLM Siri” will debut with iOS 19 in 2025, rolling out in 2026.

Meanwhile, Citi’s Consumer Electronics Holiday Survey reportedly shows increasing purchase and spending intentions for smartphones, with iPhone preference edging up to 48% from 46% last year.

Among surveyed users, 70% ranked Apple Intelligence as “somewhat important” or “the most important reason” for considering a new iPhone.

While the Asia supply chain remains steady, potential tariffs under the Trump administration could pose challenges for Apple, particularly regarding gross margins.

For now, Citi maintains a Buy rating on Apple, citing optimism around the iPhone 17 refresh cycle and a steady forecast for iPhone unit sales growth over the next three years.