Apple revealed its new foldable iPhone on Wednesday afternoon, and Wall Street analysts were largely positive about the specs and demand outlook. However, enthusiasm for the device diminished by mounting concerns that restrained price hikes across the iPhone lineup could pressure hardware margins.
Apple shares are up 1% in premarket trading in New York and about 1.6% higher since the unveiling of the new foldable iPhone and iPhone 18 Pro lineup. The new foldable iPhone starts around $2,000, with the premium model costing up to $3,199.
Did Apple learn anything from the failed launch of the $3,500 Vision Pro?
JUST IN: Internet accuses Apple of photoshopping “freakishly long” fingers into its iPhone Duo marketing, to make the massive foldable look easier to hold one-handed. pic.twitter.com/D8C19tqlFa
— Polymarket (@Polymarket) September 9, 2026
The question floating around multiple Wall Street desks overnight and into Thursday morning is how much of that foldable iPhone and new lineup demand translates into profit.
Jefferies analysts, who maintain an underperform rating and a $263.66 12-month price target, said Apple appears focused on boosting volumes at the expense of margins. Unchanged pricing for the iPhone 17 and Air could support demand while pressuring profitability.
TD Cowen, which rates Apple a “Buy” with a $400 price target, similarly warned that modest price increases could create hardware gross-margin headwinds. The analysts highlighted the new 2-nanometer chip’s doubling of AI speed.
“Price increases were modest, which aids affordability, but hardware GM could face more headwinds in the coming year,” TD Cowen analysts said.
Vital Knowledge analysts noted, “Duo is a very ‘cool’ device, with a competitive price point, but it remains to be seen whether Apple can manufacture enough of them to meet demand.”
Here is Citi analyst Atif Malik’s first take on iPhone Duo:
Apple launched a new foldable product cycle Duo under the new CEO John Ternus today. With a 7.6″ inner display and a more iPad-like multi tasking experience, Duo is the biggest new hardware category since Apple Watch/Airpods.
The launch of the iPhone 18 Pro/Pro Max (no standard iPhone 18) and the starting price of $1,999 on Duo shows Apple’s iPhone line up is heavily skewed towards premium devices this fall.
Moreover, Apple repriced the IP16/IP17 portfolio by ~$100 with bigger ~$300 increase on higher 1TB storage tier we believe to offset higher memory component prices. Overall, IP18 specs, foldable ASP are in-line and IP18 ASPs below our ~$200 preview. Net-net, with price increase on the older iPhones, we maintain our model and gross margin assumptions. New Siri AI is the most important software announcement as Apple moves from AI features towards AI agent integrated into iOS27. Maintain Buy $365 TP.
Bernstein’s Mark Newman asked clients, “What about gross margins?”
Newman explained:
Yesterday Apple held its Surprise and Shine product release, this note summarizes the products announced including specs and prices and potential impact to gross margins.
The iPhone 18 Pro and Pro Max deliver meaningful improvements with smaller price increase than expected at entry storage levels. Among the improvements, most interesting was the 2nm A20 processor and packaging enabling up to 40% higher sustained performance. The 48 MP main camera with variable aperture and significantly improved battery life (with faster charging) were the other notable improvements. Most interesting though was the price – up only $100 (or 7-8%) on entry 18 Pro and Pro Max models, which was less severe than feared and less than what we’ve seen from Android competitors. At higher storage tiers though the price increase was more substantial (with 18 Pro Max 2TB at $2,499 up $500 vs. comparable 17 Pro Max).
The well anticipated “Surprise” was the iPhone Duo – Apple’s first foldable phone, which didn’t disappoint. Unlike most competitor Android offerings, the Duo opens out to an aspect ratio similar to what we’re used to with an iPad, which should make it more intuitive and useful for watching movies or have windows side by side. Starting price of $1,999 (for the 256GB option) was also lower than feared and considering this potentially replaces a high-end iPhone and an iPad (at $1000+ each), we believe this price is competitive, but ramps up to a whopping $3,199 for 2TB.
Apple is making steady progress on AI, with the potential to monetize. Apple Intelligence runs on-device whenever possible, with more computationally demanding requests are handled through Private Cloud Compute. Some capabilities that rely on the server models will have usage limits, with increased access available through iCloud+ plans – the first signs of AI monetization.
In addition to price increases on new models, Apple bucked its trend of discounting older models by $100 and actually increased prices of older models by $100 – effectively a $200 price move. This combined with the staggered launch should reduce gross margin impact from rising memory costs.
Our analysis shows that like for like 18 Pro / Pro Max models will have significantly worse gross margins than comparable 17 Pro / Pro Max models. Entry models will see over 1000bps of gross margin dilution, and on average 14% lower gross profit $/unit. However, the iPhone Duo, increased price of older models and staggered launch should reduce this gross margin impact.
While we like the new product releases and believe gross margin hit may not be as bad as feared, there continues to be much uncertainty on new level of gross margins with today’s elevated memory prices. On the other-hand, these lower price increases on entry models should help Apple continue to gain market share over Android rivals. We rate Apple Outperform, PT $370, but worry that the stock may not work until December quarter guide is behind us (in late October).
Goldman analyst Michael Ng’s first take:
During Apple’s Special Event “Surprise and Shine” on September 9th, 2026, AAPL announced its new iPhone lineup (Foldable iPhone Duo, 18 Pro, and 18 Pro Max), updated Apple Watches (Series 12 and Ultra 4), and AirPods 5.
Overall, key product feature announcements (debut of a foldable form factor model, Touch ID to open on the iPhone Duo, new A20-series chips, and rear-camera systems) were largely as expected, and should drive continued strength in device demand.
Furthermore, AAPL’s decision to bifurcate the iPhone 18 model launches with lower-end models expected (by us) in Spring 2027 should support continued iPhone ASP growth amidst ongoing device premiumization, further supported by explicit $100 price increases for the iPhone 18 Pro and 18 Pro Max and the addition of a new premium 2 TB storage option for the iPhone 18 Pro.
We view this favorable price/mix from premium products as supportive of upside to revenue, which should partially mitigate margin headwinds.
Importantly, Apple’s new Apple Upgrade program & attractive carrier promotions (Free/$99 iPhone 18 Pro/Pro Max with eligible trade-in and plan) should support affordability against +$100 price increases. Additionally, as expected, AAPL announced new Apple Watch products (Apple Watch Series 12 and Ultra 4) and new AirPods 5. All iPhone 18 Pro and Pro Max models will be available for pre-order in over 63 countries and regions on Saturday, September 12th with availability beginning Friday, September 18th, while the iPhone Duo will be available for pre-order on Friday, October 16th with availability beginning Friday, October 23rd
Apple shares initially fell as Wednesday afternoon’s launch event began around 1 p.m. ET, then reversed course and rallied 3% from the session low.
For new CEO John Ternus, the foldable iPhone’s roughly $2,000 to $3,200 price tag sets up a major test of Apple’s pricing power and ability to scale production. Strong demand could lift revenue and shift sales toward premium devices, but soaring memory costs coupled with modest price hikes could threaten margins, according to warnings on Wall Street desks.