According to J.P. Morgan Chase, the iPhone Air uses a new design concept, but the functional configuration is not cost-effective compared to the $999 price, which may curb sales. In contrast, the Pro series has comprehensive feature upgrades and more attractive pricing, which will be the main growth driver. The basic version of the iPhone 17 remains at $799 but the storage has been increased to 256GB, which is in line with China's subsidy policy and is expected to help recover in China. The bank maintained an “gain” rating on Apple Stocks.
J.P. JPMorgan is right $Apple (AAPL.US)$ The 2025 fall press conference gave “mixed” reviews, believing that the favorable pricing of the iPhone 17 series was offset by expectations of the iPhone Air's moderate market outlook.
On September 9, JPMorgan Chase said in the latest Research Reports that the pricing of the iPhone 17, 17 Pro, and 17 Pro Max has maintained favorable levels, while the newly launched iPhone Air may suppress sales expectations due to high pricing.
The bank's Analyst pointed out that although the iPhone Air is innovative as the “thinnest iPhone in history,” the price of 999 US dollars is a sharp increase compared to the previous Plus model of $899. Coupled with its limited advantages over the Pro version, it is expected that it will be difficult to drive a significant sales growth cycle.
In contrast, the Pro series models are expected to be the main driving force for improving the product portfolio due to more comprehensive feature upgrades and more attractive pricing strategy.
According to J.P. Morgan Chase, the basic version of the iPhone 17 maintains a starting price of 799 US dollars, but the initial storage capacity has been raised to 256GB, which makes it eligible for subsidies from the Chinese market, which is expected to help Apple continue to recover in the region.
J.P. JPMorgan maintains an “gain” rating on Apple's Stocks, believing that although there is uncertainty about the market prospects of the iPhone Air, the pricing strategy and functional upgrades of the overall product line still support positive investment views.
iPhone Air pricing strategy raises sales concerns
J.P. JPMorgan believes that the iPhone Air's high pricing strategy may limit its market performance. The 5.6-millimeter-thick device is equipped with an A19 Pro chip and ProMotion 120Hz display, but is only equipped with a single 48 million-pixel rear camera. The battery life is 27 hours, which is significantly lower than the 30 hours of the basic iPhone 17 and 39 hours of the 17 Pro.
Analyst said that although Air uses a new design concept, its functional configuration is not cost-effective compared to the $999 price. In particular, compared to the $1,099 17 Pro, the price difference of only $100 has a clear gap in camera configuration and battery life, which may affect consumers' purchasing decisions.
According to historical data, the Plus series models usually only account for a medium to high single-digit percentage of total iPhone sales. J.P. JPMorgan predicts that although the Air may achieve an incremental increase compared to the Plus model, it will be difficult to meet the market's previous optimistic expectations of a significant increase in sales.
The Pro series has outstanding pricing advantages, and the Chinese market has received policy support
The iPhone 17 series showed Bullish Signals in terms of pricing strategy. The basic iPhone 17 maintains a starting price of $799, but the storage capacity has been increased from 128GB to 256GB. The starting price of the 17 Pro increased from $100 to $1,099, mainly reflecting the increase in storage capacity, while the 17 Pro Max remained unchanged at $1199.
J.P. JPMorgan specifically emphasized that the pricing strategy for the iPhone 17 basic edition has important market significance. The price of $799 is combined with 256GB of starting storage, making it in line with the Chinese market's subsidy policy requirements, which will help Apple continue its recovery momentum in the Chinese market in recent quarters.
In the entire iPhone 17 product line, the Pro model is the most significant upgrade. The 17 Pro and 17 Pro Max not only remained basically the same in terms of pricing, but also achieved substantial improvements in functional configuration, including a comprehensive 48 million pixel triple camera system upgrade and expanded camera module design.
J.P. JPMorgan predicts that the Pro model will be the main driving force for improving the product portfolio. A stronger upgrade range combined with the maintenance pricing strategy is expected to attract more consumers to choose high-end models, thereby increasing Apple's average sales price and profit margin.
Operators' trade-in offers are increasing, and innovation in accessory products is limited
According to J.P. Morgan Chase, the trade-in offers offered by major US carriers for the iPhone 17 series are more generous than the iPhone 16 cycle. More specifically:
$Verizon (VZ.US)$Trade-in subsidies of up to $830/$1000/$1,100/$1,100 are offered for the basic/Air/Pro/Pro Max.$AT&T (T.US)$It provides $800/$830/$1,100/$1,100, while T-Mobile provides a uniform subsidy of $1,100 for all models.
In contrast, the iPhone 16's trade-in policy when it was released was:
Verizon offers $830/$930/$1,000/$1,000, AT&T offers $800/$800/$1000/$1,000, and T-Mobile uniformly provides $1,000.
The bank's Analyst believe that these more favorable trade-in policies will help stimulate consumer demand for upgrades.
In terms of accessory products, the Apple Watch Series 11 maintains a $399 pricing. Major updates include 5G connectivity, blood pressure monitoring, and high blood pressure notification features.
Apple Watch Ultra 3 adds satellite connectivity and remains priced at $799. AirPods Pro 3 adds real-time translation and heart rate sensor features, and remains priced at $249.
J.P. JPMorgan believes that although these accessory products have significant innovations at the functional level, their impact on the overall investment logic is relatively limited, and the main driving force will still come from the performance of the iPhone product line.
Edit/Doris
