Apple's newly introduced AI Siri will have limited reach among many existing users, as older iPhone models are not equipped to run sophisticated AI features, Morgan Stanley said in a research note on Tuesday.

More than 850 million iPhones are incapable of running basic Apple Intelligence queries, and more than 1.3 billion iPhones cannot use advanced Siri features, the brokerage said.

The long-delayed Siri overhaul was the centerpiece of Apple's annual Worldwide Developers Conference on Monday, with the world's most valuable smartphone maker betting on the feature to keep pace with rivals including OpenAI's ChatGPT, Google's Gemini and Anthropic's Claude.

Selling hardware on the strength of software is challenging, Morgan Stanley cautioned, even as AI accessibility ranks among the leading drivers of smartphone upgrades.

The bottleneck for the upgraded Siri and AI tools comes down to chip architecture and memory. Users need 12 GB of unified memory to run the most advanced Siri features, owing to the volume of on-device processing that Apple Intelligence requires, the brokerage said.