Investing.com -- Apple’s next wave of AI-powered features may be resonating more strongly with U.S. consumers than previously anticipated, according to a new Morgan Stanley survey.

In its March 2025 AlphaWise U.S. iPhone survey, Morgan Stanley told investors in a note that it found “stronger-than-expected Apple (NASDAQ: AAPL ) Intelligence engagement, consumer perception, and NPS.”

Among current iPhone owners using Apple Intelligence, willingness to pay for the service rose 11% since last fall, reaching an average of $9.11 per month, according to the bank.

The survey of 3,300 U.S. consumers is said to have also revealed that 51% of iPhone owners are “extremely likely” to upgrade their device in the next 12 months, marking an all-time high in the firm’s survey history.

Morgan Stanley said the results showed “record N12M US upgrade intentions.”

Beyond software, hardware interest also surprised to the upside.

The bank said 40% of respondents are “extremely interested” in either a thin iPhone expected this fall or a foldable model possibly arriving in late 2026.

While Apple continues to face near-term headwinds—including “uncertain tariff policy, persistent China smartphone weakness, and legal/regulatory cases”—Morgan Stanley emphasized the long-term upside if the company executes well on both its AI and hardware ambitions.

“Apple’s software and hardware advances—if properly executed upon—should help to accelerate device replacement cycles and create incremental Services revenue opportunities,” the firm wrote.

Supporting that view, the bank noted recent supply chain checks pointing to high-single-digit year-over-year growth in iPhone 17 component shipments in the second half of 2025, “ahead of MS and buyside expectations.”