Apple Aims High with Foldable iPhone Launch: Can Premium Devices Drive Revenue Growth?
Apple's upcoming September product cycle is expected to be a key test for investors as they shift their focus from the company's recent earnings report. The tech giant is planning to introduce several new devices, including the iPhone 18 Pro, Pro Max, and its first foldable iPhone. However, there's a twist - the base iPhone 18 may be postponed until spring 2027, which could potentially raise the average selling price of devices and improve margins.
Market estimates suggest that the foldable iPhone will have a price tag of around $2,000 or higher, while initial shipment volumes are expected to be limited. This has raised concerns about Apple's ability to drive revenue growth with more expensive devices following a strong quarter. In its third fiscal quarter, Apple increased revenue by 16% year-over-year to $109.4 billion and EPS by 29% to $2.02, while setting records for iPhone, Mac, and Services sales in the June quarter.
The high comparison base has set the bar higher for the fall sales cycle, making it essential for Apple to prove that premium devices can support revenue growth. Additionally, the company's AI strategy is gaining attention as investors consider a more pragmatic scenario - accelerating Siri and Apple Intelligence development through external models without significant capital spending on AI infrastructure.
Analysts at Rothschild & Co Redburn even suggest a potential partnership with Nvidia to strengthen Apple's AI positioning and reduce its dependence on Gemini. However, this remains a speculative catalyst rather than a proven source of additional profit.