Strong iPhone 17 cycle giving better than expected revenue, says Bernstein's Mark Newman

Core Viewpoint - The analysis indicates that Apple may benefit from a 15% increase in prices due to rising memory costs, although this could lead to a slight decline in unit growth as consumers may delay purchases or opt for lower-spec models [1][2]. Group 1: Price Impact and Consumer Behavior - A 15% price increase translates to approximately $150 more per device, which is significant and may deter some consumers from purchasing [1]. - Initial estimates for unit growth in fiscal year 2027 were around 5-6%, but these have been adjusted to flat growth due to price pressures on consumers [1][2]. Group 2: iPhone Sales and Future Projections - The strong sales of the iPhone 17 are attributed to many consumers upgrading from older devices that are four to five years old, which may also positively influence the iPhone 18 cycle [1]. - Despite the anticipated price pressures, there is a belief that the iPhone 18 cycle will still see some benefits from the current upgrade trend [1]. Group 3: Apple Intelligence and Market Position - The development of Apple Intelligence, particularly the anticipated Siri 2.0, is viewed as a critical factor for Apple's stock performance this year, especially given the company's two-year delay in this area [3][4]. - A partnership with Google for the Google Gemini project is expected to yield meaningful advancements in Apple Intelligence, potentially driving unit growth and service monetization [4][5]. - Overall, Apple Intelligence is considered a more significant driver for stock performance than price changes, leading to an increase in target price for the stock [5].