AAPL hosted its “Surprise and Shine” launch event on 9 September, one of the most significant hardware launches in recent years, headlined by the iPhone Duo, AAPL’s first foldable smartphone. Alongside the Duo, AAPL introduced the iPhone 18 Pro and Pro Max, Apple Watch Series 12 and Ultra 4, and AirPods 5.
- iPhone Duo starts at US$1,999, establishing an entirely new price tier above the Pro Max, while the iPhone 18 Pro and Pro Max received a US$100 price increase, starting at US$1,199 and US$1,299. This should provide further support to iPhone ASPs.
- We expect the new lineup to generate strong initial demand, particularly for the iPhone Duo due to its novelty. However, the sustainability of demand at increasingly premium price points remains to be tested. Meanwhile, AI remains the weaker part of AAPL’s investment story, and execution and adoption will likely determine whether Apple Intelligence becomes a meaningful driver of replacement cycles.
- We maintain our REDUCE recommendation, with an increased DCF target price of US$300 (prev. US$290). We raise our FY27e revenue/PATMI estimates by 1%/2% to reflect higher iPhone ASPs and a stronger product mix following the launch of iPhone Duo and price increases across the Pro lineup. Our WACC of 6.5% and terminal growth of 3.5% remain unchanged. Supply constraints, rising memory costs, and AI regulations weigh on the near term, and so far, no clear evidence of Apple Intelligence meaningfully driving product upgrades.
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