Goldman Sachs Sees Golden Opportunity with Apple's iPhone 17: Strategic Tweaks and Hidden Price Hikes Poised to Boost Revenue

Goldman Sachs has expressed optimism regarding Apple's forthcoming iPhone 17 series, suggesting that strategic product line adjustments, performance enhancements, and a "hidden" price increase strategy could effectively stimulate user demand to upgrade their devices. The firm projects that Apple's iPhone revenue will grow by 5% in the 2025 fiscal year, with an accelerated growth rate of 7% in the 2026 fiscal year.

Apple announced its eagerly anticipated "Awe Dropping" event scheduled for September 10, where the public expects new technology revelations, including an ultra-thin iPhone, a new Apple Watch with satellite connectivity, and the much-rumored AirPods Pro 3. Ahead of this event, Goldman Sachs analyst Michael Ng has reiterated a "buy" rating for Apple stocks, foreseeing positive triggers for future revenue growth in the iPhone business.

Ng noted enthusiasm for the anticipated innovations in the iPhone 17 series' form factor, potential price adjustments for the Pro model, and the ongoing promotional competition among U.S. telecom carriers. These factors contribute to the firm's forecast of steady revenue increments over the next two fiscal years. The comprehensive analysis underscores that these changes could attract users with older devices to upgrade, boosting Apple's overall sales.

Goldman Sachs anticipates Apple will launch four new models during the iPhone 17 cycle, with a notable lineup adjustment. The expected models include the base iPhone 17, iPhone 17 Pro, iPhone 17 Pro Max, and a new iPhone 17 "Air" model, which will replace the existing "Plus" version. The "Air" model is purportedly designed to be lighter and slimmer, with its screen size between the 6.3-inch iPhone 17 Pro and the 6.9-inch Pro Max. Furthermore, the base model iPhone 17 is set to increase its screen size to align with the Pro model.

The anticipated series is set to enhance hardware capacity to support Apple's expanding AI functionalities. Goldman Sachs' report suggests the inclusion of the upgraded A19 series processors, with memory increased from 8GB in the iPhone 16 models to 12GB. High-end chips will likely power the Pro and Pro Max models, while the base and "Air" models might feature slightly lower performance versions. This improvement aligns with the anticipated AI-enhanced Siri expected in 2026, among other intelligence updates.

Goldman Sachs expects a "hidden" price hike strategy to enhance the Pro model's average selling price (ASP). While the base iPhone 17 and Pro Max model prices are expected to remain steady, significant changes may occur with the Pro model, which might eliminate the 128GB storage option. By positioning 256GB as the entry-level configuration, the starting price would increase, following a strategy similar to the iPhone 15 Pro Max release in 2023.

Goldman Sachs predicts that structural changes in the iPhone 17 product line will support revenue growth throughout the fiscal years 2025 to 2026. Larger screen displays, enhanced front cameras, and superior processors could encourage device upgrades among users whose devices are several years old or incapable of supporting Apple Intelligence functionalities.

The expected price strategy could elevate the overall ASP as device shipments increasingly favor higher-end models. However, Goldman Sachs maintains a neutral outlook on the iPhone 17 Air model, viewing its lighter design as potentially appealing but considering possible compromises in battery capacity and rear camera capabilities as limiting its allure compared to the base model.