Apple unveiled the iPhone 18 Pro line and its first foldable phone, the Duo, on Wednesday, raising prices on new and older models. Analysts say the company is balancing unit sales against profit margins as inflation squeezes consumers, and shares rose in response.
Apple shares rose 1.4% on Thursday morning after the company unveiled its new iPhone 18 Pro line and its first foldable phone, the Duo. Pricing was the big unknown heading into the event, and Apple ended up raising costs across both new and older models.
Apple raises prices across the iPhone lineup
Jefferies analysts, led by Edison Lee, said Apple appears more focused on the number of devices it can sell than on its margins. He noted that the $100 price hikes on newer and earlier-generation phones came in below the $150 to $200 increases Apple applied to the iPad and MacBook this summer.
JPMorgan analysts, led by Samik Chatterjee, described Apple's approach to pricing. According to MarketWatch: "tightrope on products to preserve volumes and margins". They flagged that consumers will get flexibility through a new leasing program as well as various trade-in offers, and believe that combination of favorable pricing moves and AI features will drive robust iPhone revenue growth.
The foldable Duo becomes Apple's priciest phone
Monness, Crespi, Hardt & Co. analyst Brian White called the Duo Apple's priciest iPhone ever, starting at $1,999. He noted that Apple had boosted prices for other products in June but spared the iPhone until Wednesday's event.
White said Apple is attempting to smooth out the seasonality of its iPhone revenue by introducing a new cadence for iPhone releases and updates. The company held off on updates to its base-level iPhone models during the event, instead focusing on more premium smartphones. He expects the two standard iPhone models to be updated in early 2027, potentially alongside Apple's budget-friendly iPhone 18e.
Margin pressure looms over the new launches
Bernstein analyst Mark Newman wrote that Apple bucked its trend of discounting older models by $100, instead raising prices on those older models by $100. He said this move, combined with the staggered iPhone launch, could offset the impact of rising memory costs on gross margins.
Newman wrote that while he likes the new product releases and believes the gross-margin hit may not be as bad as feared, uncertainty remains over the new level of gross margins given today's elevated memory prices.
Source: MarketWatch
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