Morningstar's William Kerwin on what to watch at Tuesday's Apple event

Core Viewpoint - The upcoming launch of the iPhone 17 is not expected to significantly impact Apple's stock or growth expectations, despite the introduction of a new ultra-thin model potentially named iPhone Air [2][3]. Product Launch and Pricing Strategy - The iPhone 17 lineup is anticipated to include a new form factor, but long-term unit sales growth for iPhones is expected to slow compared to historical levels [2][3]. - Apple may adjust entry-level storage pricing, potentially increasing the base model price by $100, but this is seen as manageable given that Apple has not raised base prices in five years [4][5]. - The company has effectively made its phones cheaper in real terms since 2020 due to inflation, suggesting consumers may not react strongly to a price increase [5]. AI Integration and Future Growth - There is skepticism about the emergence of an "iPhone super cycle," as significant AI features promised have yet to be delivered [6][7]. - The focus of the upcoming event is expected to be on hardware rather than software updates related to AI [7][8]. - Apple's position in the AI space is strong due to its vertically integrated platform, which could lead to revenue gains if it partners with third parties for AI development [10][11]. Market Context and Stock Valuation - Positive catalysts for Apple's stock include the Google antitrust case, which may allow Apple to maintain its revenue from search provider payments [9]. - Despite these catalysts, the primary driver of Apple's growth remains iPhone sales, which are projected to slow [9]. - A conservative fair value estimate for Apple stock is around $210 per share, indicating potential market challenges ahead [10].