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

According to Zhihui Finance APP, in the early hours of Thursday, Apple (AAPL.US) held its autumn launch event themed "Brighter Chapter, More Dazzling". This was the first autumn launch event since new CEO John Ternus took over. At the event, Apple unveiled the highly-anticipated foldable smartphone iPhone Duo, iPhone 18 Pro/Pro Max, Apple Watch Series 12/Ultra 4, as well as AirPods 5.

In response, Goldman Sachs and JPMorgan subsequently released research reports, stating that the overall event met expectations, and both maintained their bullish ratings on Apple. In addition, both investment banks believe that Apple adopted a sophisticated pricing and promotional strategy to balance between "protecting sales volume" and "preserving margins," which will drive sustained strong demand for devices.

Balanced Pricing Strategy, Multiple Tools to Offset Consumer Pressure from Price Increases

It is understood that this time, the starting price for iPhone 18 Pro was raised by $100 to $1,199, while the iPhone 18 Pro Max starts at $1,299. JPMorgan commented that, amidst rising memory component costs, Apple's choice of a uniform $100 price increase—lower than some investors’ expectations for a steeper hike—strikes a balance between absorbing upstream cost pressure and maintaining the shipment cycle.

The price hike not only covers the new Pro models; previous-generation iPhone 17, Air, 17e, and 16 series also see simultaneous increases for the same configurations. The price gap between storage variants has further widened, with even higher increases for the 1TB and 2TB versions. JPMorgan believes that since Pro Max users tend to prefer larger storage options, this will push up the overall average selling price (ASP).

In addition, to offset the impact of price hikes on end-user purchase intentions, Apple has rolled out a comprehensive set of payment and trade-in options. The Apple Upgrade leasing plan, supported by Klarna (KLAR.US) and launched in July, replaces the previous iPhone upgrade plan. The iPhone 18 Pro can be leased for $34.99 per month over 24 months or $49.99 per month for 12 months, with users having the choice to upgrade to a new phone, buy out the device, or return it at the end of the term. US carriers AT&T (T.US) and T-Mobile (TMUS.US) offer trade-in subsidies of up to $1,200, and Apple’s official trade-in value goes up to $885. With these multiple tools combined, monthly actual spending by upgrading users stays roughly in line with last year.

Goldman Sachs added that carrier promotions can even allow eligible users to get the iPhone 18 Pro almost for free or the Pro Max for just $99. This subsidy system can effectively buffer demand shocks caused by official price increases.

For non-smartphone hardware, Apple kept prices stable or even lowered them: Apple Watch Series 12 starts at $399 and Ultra 4 at $799; the AirPods 5 with active noise cancellation is priced at $129, which is lower than the previous generation with the same features. JPMorgan pointed out that Apple’s proprietary C2 modem is now included across all new autumn products; vertical integration and redesigned components help Apple reduce material costs, absorb rising supply chain pressures, and support the pricing strategy for wearables and earbuds.

New Foldable iPhone Duo is the Main Highlight, Software Differentiation Builds Competitive Barriers

Apple's first foldable smartphone, iPhone Duo, was the centerpiece of the entire event, with the 256GB version starting at $1,999, targeting Samsung Z Fold8’s $1,899 entry price.

JPMorgan believes this pricing is competitive in the market and could attract Android foldable users to switch to Apple's ecosystem. On the hardware side, the model features a 7.6-inch internal screen, a 5.4-inch external screen, and a titanium alloy frame. When unfolded, this is the thinnest iPhone ever; the software adaptation is also a key highlight, as the system can sense folding angles and support various semi-folded using styles. Zoom, Slack, and Netflix have already completed API adaptation, and support for Apple Pencil is expected later this year.

Regarding the rollout schedule, pre-orders for the iPhone 18 Pro series start September 12, with official sales beginning September 18; iPhone Duo pre-orders open October 16, with an official release on October 23. JPMorgan commented that the market initially expected 10 million Duo units shipped in calendar year 2026, but with stronger product appeal and pricing, the actual figure may exceed expectations.

Goldman Sachs also sees incremental growth from foldable products and notes that Apple is delaying launches for entry-level models like the base iPhone 18 and Air2 until spring 2027, so only high-end models will debut this quarter. While this creates a high year-on-year comparison base in the short term and may weigh on shipments temporarily, the concentration of sales in the high-end segment will raise overall iPhone ASPs, benefiting revenue performance.

Overall, JPMorgan maintains its "Overweight" rating on Apple, stating that the Siri AI large model capabilities to be beta-tested in mid-September, combined with the reasonable product pricing strategy, will jointly drive strong growth in iPhone revenue. Initial supply chain shipment data in the first few weeks after launch are poised to be a catalyst for share price appreciation.

Goldman Sachs also maintains its "Buy" rating on Apple, with a 12-month target price of $360. The bank believes that Apple’s massive installed device base, long-term growth potential in services, and innovative hardware such as foldables are core drivers of Apple’s intrinsic value. Revenue growth from hardware product premiums can help offset the impact of cost inflation, and these factors will continue to support the “Apple-as-a-Service” investment narrative.