Wall Street is optimistic about Apple (AAPL.US)'s new growth cycle! iPhone 18 price increase boosts ASP, folding screen and AI are expected to open up incremental space

The Zhitong Finance App learned that in the early hours of Thursday morning, Apple (AAPL.US) held a fall press conference with the theme “Bright New Stories, Let's Be Dazzling”. This was the first fall press conference since the new CEO John Turnus took office. At the conference, Apple unveiled the high-profile folding screen phones iPhone Duo, iPhone 18 Pro/Pro Max, Apple Watch Series 12/Ultra 4, and AirPods 5.

In response, Goldman Sachs and J.P. Morgan Chase later released research reports, stating that the press conference was in line with expectations as a whole, and both maintained their bullish ratings on Apple. Furthermore, both investment banks believe that Apple has adopted an exquisite pricing and promotion strategy between “guaranteed sales” and “guaranteed profit margins,” which will drive continued strong demand for equipment.

Pricing adopts a balanced strategy, and multiple tools are used to hedge against consumption pressure brought about by price increases

According to information, the starting price of the iPhone 18 Pro has increased from $100 to $1199, and the iPhone 18 Pro Max has reached $1,299. J.P. Morgan said that in the context of rising memory component costs, Apple chose a unified price increase of 100 US dollars, which is lower than the larger price increase previously anticipated by some investors, and is a move to walk a tightrope between absorbing upstream cost pressure and maintaining the shipping cycle.

The price increase not only covers the new Pro models, but the previous-generation iPhone 17, Air, 17e, and 16 series simultaneously increased the price list price with the same configuration. The price difference between storage tiers has further widened, and the price increase of the 1TB and 2TB versions is higher. J.P. Morgan believes that since Pro Max users are more inclined to buy high-capacity versions, this will drive up the overall mixed average selling price (ASP).

Furthermore, in order to offset the impact of price increases on the willingness to buy terminals, Apple has provided a complete payment and trade-in plan. The Apple Upgrade rental plan, launched in July and supported by Klarna (KLAR.US), replaced the old iPhone upgrade plan. The iPhone 18 Pro can choose a 24-month monthly rental plan, or a 12-month rental plan of $49.99. Users can choose to upgrade a new phone, buy out the device, or directly return the machine when it expires. US operators AT&T (T.US) and T‑Mobile (TMUS.US) can provide up to $1,200 in trade-in subsidies, and Apple's official replacement amount can reach up to $885. The combination of multiple tools has made the actual monthly expenses of switching users basically the same as last year.

Goldman Sachs added that the operator's discount can even allow eligible users to get the iPhone 18 Pro almost free of charge, only $99 to get the Pro Max. This subsidy system can effectively cushion the impact of demand brought about by the rise in official pricing.

In terms of non-mobile phone hardware, Apple has maintained price stability or even reduced prices: the Apple Watch Series 12 maintains a starting price of $399 and the Ultra4 maintains a starting price of $799; the AirPods 5 version with active noise cancellation is priced at $129, which is a reduction in price compared to the previous generation of products with the same features. J.P. Morgan Chase pointed out that the self-developed C2 modems are already fully equipped with all new products this fall. Vertical integration and component redesign can help Apple reduce material costs, absorb upward pressure on supply chain costs, and support the pricing strategy for watches and headsets.

The new folding iPhone Duo is the biggest highlight, and software differentiation builds competitive barriers

Apple's first folding screen phone, the iPhone Duo, was the central focus of the entire press conference. The starting price of the 256GB version was $1999, compared to the starting price of $1,899 for the Samsung Z Fold8.

J.P. Morgan believes that this pricing is competitive in the market and is expected to attract Android folding screen users to switch to the Apple ecosystem. At the hardware level, this model is equipped with a 7.6-inch inner screen, a 5.4-inch outer screen, and a grade 5 titanium body. When unfolded, it is the thinnest iPhone ever; at the same time, the highlight is software adaptation. The system can sense the folding angle and adapt to various forms of use when half-folded. Zoom, Slack, and Netflix have already completed API adaptations, and will support Apple Pencil later this year.

In terms of the launch schedule, the iPhone 18 Pro series began pre-order on September 12 and went on sale on September 18; the iPhone Duo pre-order began on October 16, and it was only officially launched on October 23. J.P. Morgan said that the market originally expected Duo to ship 10 million units in the 2026 natural year, but considering product strength and pricing, the actual shipment volume is expected to be higher than that forecast.

Goldman Sachs is also optimistic about the increase brought about by folding products. At the same time, it noticed that Apple postponed the release of basic entry-level models such as the iPhone 18 and Air2 until the spring of 2027; only high-end models will be launched this quarter. Although it will face a high year-on-year base in the short term, putting pressure on phased shipments, the concentration of product sales towards the high-end will boost the overall ASP of the iPhone, which will benefit revenue performance.

Overall, J.P. Morgan maintained Apple's “gain” rating, and said that the ability of the Siri AI model, which began beta testing in mid-September, combined with this reasonable product pricing strategy, will jointly drive strong iPhone revenue growth; supply chain shipment data from the first few weeks of listing is expected to be a catalyst for upward stock prices.

Goldman Sachs also maintains Apple's “buy” rating, with a target price of $360 for 12 months. The bank believes that a huge user base of equipment, long-term growth space for service businesses, and innovative hardware such as folding screens are the core support for Apple's value. Revenue growth due to hardware product premiums can partially hedge the impact of cost inflation. These factors will continue to support the “Apple-as-a-Service” (Apple-as-a-Service) investment narrative.