Apple unveiled its latest foldable iPhone on Wednesday afternoon, receiving mostly positive feedback from Wall Street analysts regarding its specs and demand outlook. However, concerns began to rise about the impact of restrained price increases on the iPhone lineup and how it could affect hardware margins.
Despite this, Apple shares saw a 1% increase in premarket trading in New York, with a 1.6% rise since the reveal of the new foldable iPhone and iPhone 18 Pro lineup. The foldable iPhone starts at around $2,000, with the premium model priced at up to $3,199. This pricing strategy raises questions about whether Apple learned from the failed launch of the $3,500 Vision Pro.
There were accusations on the internet that Apple may have used photoshop to make the foldable iPhone look more manageable with “freakishly long” fingers in its marketing imagery. However, the main focus on Wall Street was on how the demand for the new devices would translate into profit.
Jefferies analysts expressed concerns that Apple’s focus on boosting volumes could come at the expense of margins, while TD Cowen warned about potential headwinds on hardware gross margins due to modest price increases. Vital Knowledge analysts noted the high demand for the new foldable iPhone but questioned whether Apple could meet this demand.
Citi analyst Atif Malik highlighted the significant improvements in the iPhone Duo and the premium pricing strategy for the iPhone 18 lineup. Bernstein’s Mark Newman discussed the impact on gross margins from the new product releases, emphasizing the importance of price increases on new models and the introduction of the iPhone Duo.
Goldman analyst Michael Ng provided a positive outlook on Apple’s new product announcements, emphasizing the expected strength in device demand and revenue growth. The favorable price/mix from premium products was seen as supportive of upside to revenue, despite potential margin headwinds.
Overall, the launch of Apple’s new foldable iPhone and iPhone 18 lineup presented a major test for the company’s pricing power and production scalability under new CEO John Ternus. While strong demand could boost revenue and shift sales towards premium devices, challenges such as soaring memory costs and modest price hikes could impact margins, according to insights from Wall Street analysts.