Apple Launches First Foldable iPhone Amid Pricing and AI Challenges September 22, 2026

Brief Overview

Apple held its “Surprise and Shine” event on 9 September, launching several new products including its first foldable smartphone, the iPhone Duo. The iPhone Duo starts at US$1,999, whilst the iPhone 18 Pro and Pro Max received US$100 price increases to US$1,199 and US$1,299 respectively. Phillip Securities Research maintains a REDUCE recommendation with a raised target price of US$300, citing concerns over demand sustainability and AI execution despite expecting strong initial demand.

Investment Positives

The introduction of the iPhone Duo creates an entirely new price tier above the Pro Max, which should provide further support to iPhone average selling prices (ASPs). The analyst expects the new product lineup to generate strong initial demand, particularly for the iPhone Duo due to its novelty factor as Apple’s first foldable smartphone.

The pricing strategy across the range, including US$100 price increases for the iPhone 18 Pro and Pro Max models, is expected to strengthen the overall product mix. This has prompted the analyst to raise FY27e revenue and PATMI estimates by 1% and 2% respectively, reflecting the anticipated benefits of higher iPhone ASPs and an improved product mix following the iPhone Duo launch and Pro lineup price increases.

Challenges

The sustainability of demand at these increasingly premium price points remains untested and represents a key concern for the investment outlook. The analyst notes that AI remains the weaker component of Apple’s investment story, with execution and adoption likely to determine whether Apple Intelligence becomes a meaningful driver of replacement cycles.

Several near-term headwinds weigh on the company’s prospects, including supply constraints, rising memory costs, and AI regulations. Significantly, there is currently no clear evidence that Apple Intelligence is meaningfully driving product upgrades, which undermines a key potential growth catalyst.

Outlook

The outlook remains complicated despite the exciting new foldable product launch. Whilst strong initial demand is expected, particularly for the innovative iPhone Duo, the combination of unproven demand sustainability at premium price points and weak AI positioning creates uncertainty. The success of the product launches will likely depend on consumer acceptance of higher pricing and the eventual effectiveness of Apple Intelligence in driving upgrade cycles.

Recommendation & Target Price

Phillip Securities Research maintains a REDUCE recommendation on Apple Inc. The DCF target price has been increased to US$300 from the previous US$290, based on higher expected iPhone ASPs and stronger product mix. The WACC of 6.5% and terminal growth rate of 3.5% remain unchanged.

Frequently Asked Questions

Q: What new products did Apple launch at its September event?

A: Apple introduced the iPhone Duo (its first foldable smartphone), iPhone 18 Pro and Pro Max, Apple Watch Series 12 and Ultra 4, and AirPods 5.

Q: How is the iPhone Duo priced compared to other models?

A: The iPhone Duo starts at US$1,999, establishing an entirely new price tier above the Pro Max, whilst the iPhone 18 Pro and Pro Max received US$100 price increases to US$1,199 and US$1,299 respectively.

Q: What are the main investment positives for Apple?

A: The new pricing strategy should support iPhone ASPs, with strong initial demand expected for the iPhone Duo due to its novelty, and the improved product mix is also expected to lead to higher revenue and profit estimates.

Q: What challenges does Apple face?

A: Key challenges include unproven demand sustainability at premium price points, weak AI positioning, supply constraints, rising memory costs, and AI regulations.

Q: How effective is Apple Intelligence in driving upgrades?

A: Currently, there is no clear evidence that Apple Intelligence is meaningfully driving product upgrades, and its execution and adoption will determine its impact on replacement cycles.

Q: What is the analyst's recommendation and target price?

A: Phillip Securities Research maintains a REDUCE recommendation with a target price of US$300, increased from US$290.

Q: Why was the target price increased despite maintaining a REDUCE rating?

A: The target price increase reflects higher iPhone ASPs and a stronger product mix following the iPhone Duo launch and Pro lineup price increases, leading to 1% and 2% increases in FY27e revenue and PATMI estimates respectively.

This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.

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