Apple's iPhone 17 Impresses On Design, But Analysts Say AI Still Lags

Core Insights - Analysts praised Apple's iPhone 17 event for its thinner designs, upgraded cameras, and enhanced AI-health integration, but noted that innovation is incremental [1] - Apple is currently lagging behind market performance, with a focus on battery life, storage upgrades, and ecosystem loyalty, while facing challenges in AI rollouts and reliance on replacement-driven demand [1] Financial Projections - Bank of America Securities analyst Mohan raised Apple's fiscal 2026 revenue forecast to $448 billion and EPS to $8.05, reflecting increased confidence in growth [3] - The forward P/E multiple was increased to 32 times from 31 times, indicating a positive outlook on Apple's growth trajectory [6] Product Features and Market Position - The iPhone 17 Air starts at $999, featuring a thinner design and 256GB base storage, while Pro models include camera upgrades and new in-house chips [4] - The iPhone 17 lineup, including the Apple Watch Series 11 and AirPods Pro 3, largely met expectations, with notable features driving sustained demand [9] Pricing Strategy - Apple eliminated the 128 GB storage tier and introduced a 2 TB option for the Pro Max, effectively increasing average selling prices by about $100 for the iPhone 17 Pro and Air [10] - The unchanged $799 entry price for the base iPhone 17 supports installed base growth while maintaining premiumization at higher tiers [10] Brand Loyalty and Services Growth - Apple's brand loyalty and ecosystem stickiness contribute to lower churn and acquisition costs, providing visibility into long-term revenue durability [11] - Services are projected to drive most gross profit growth over the next five years, justifying Apple's premium valuation despite cyclical headwinds in product revenue [12] Stock Performance - At the time of publication, Apple shares were down 3.12% at $227.04, trading within a 52-week range of $169.21 to $260.10 [13]