Goldman Sachs predicts Apple iPhone 17 launch event: very optimistic, will drive revenue growth

Goldman Sachs holds an optimistic view on the upcoming iPhone 17 series, expecting that significant updates to the new models and clever pricing strategies will effectively stimulate user demand for upgrades, driving sustained growth in Apple Inc.'s key iPhone business revenue over the next two years.

Apple Inc. announced this Tuesday that its highly anticipated "Awe Dropping" special event will be held at 1:00 AM Beijing time on September 10. The market generally expects the launch of a brand new ultra-thin iPhone, a new Apple Watch with satellite connectivity, and the long-rumored AirPods Pro 3. Ahead of this launch event, the team led by Goldman Sachs analyst Michael Ng reiterated its "buy" rating on Apple stock in a report to clients.

Michael Ng expressed encouragement regarding updates to the iPhone 17 series product forms, potential price increases for Pro models, and ongoing device promotion competition among U.S. carriers. Based on these factors, Goldman Sachs predicts that Apple’s iPhone business revenue will grow by 5% year-on-year in fiscal year 2025, and further accelerate to a 7% year-on-year growth in fiscal year 2026.

This positive outlook is based on a comprehensive analysis of the iPhone 17 series, from product lineup and performance upgrades to pricing strategies. Analysts believe these changes will not only attract users with older devices to upgrade but will also effectively enhance the average selling price of products, injecting new momentum into Apple's growth.

New Product Lineup and Performance Upgrades Drive AI Features

Goldman Sachs expects Apple to launch four new models during the iPhone 17 cycle, with significant adjustments to the product line. The specific lineup includes the iPhone 17 (base model), iPhone 17 Pro, iPhone 17 Pro Max, and a brand new iPhone 17 "Air" model, which will replace the existing "Plus" model.

In terms of form factor, the most notable change is the introduction of the "Air" model. Reports indicate that this model will be lighter and thinner than other iPhone models, with a display size between the 6.3-inch iPhone 17 Pro and the 6.9-inch Pro Max. Additionally, the screen size of the base iPhone 17 will increase from 6.1 inches in the 16 series to 6.3 inches, aligning it with the Pro models.

The hardware performance of the iPhone 17 series is expected to see significant enhancements to support Apple's growing artificial intelligence capabilities. The Goldman Sachs report notes that the new series will be equipped with an upgraded A19 series processor and will increase memory from 8GB in the iPhone 16 to 12GB Among them, the iPhone 17 Pro and Pro Max models will be equipped with the high-end A19 Pro chip, while the base and Air models may use the slightly less powerful A19 base version or a downclocked A19 Pro chip. The stronger chip performance and larger memory capacity are believed to be preparations for the upcoming Apple Intelligence feature updates, including the AI-enhanced Siri expected to be released in 2026.

In addition, the front camera of the entire iPhone 17 series is expected to upgrade from 12 million pixels to 24 million pixels.

"Implicit" Price Increase Strategy and Revenue Growth Prospects

In terms of pricing, Goldman Sachs predicts that Apple may adopt an "implicit" price increase strategy to boost the average selling price (ASP) of high-end models. Analysts expect that the starting price of the base iPhone 17 (starting at $799 for 128GB) and the Pro Max model (starting at $1199 for 256GB) will remain consistent with the previous generation.

However, for the iPhone 17 Pro model, Apple may eliminate the 128GB storage option, making 256GB the new entry-level configuration, with the starting price raised to $1099 accordingly. This strategy is similar to Apple's approach when releasing the iPhone 15 Pro Max in 2023, when the starting price of the Pro Max was effectively adjusted from $1099 to $1199 by eliminating the 128GB version. As for the new iPhone 17 Air, its pricing is expected to be roughly in line with the iPhone 16 Plus at $899.

Overall, Goldman Sachs believes that the product lineup of the iPhone 17 is sufficient to support its revenue growth from fiscal year 2025 to fiscal year 2026. From the demand side, the larger base model screen, improved front camera, and stronger processor will strongly drive device upgrades, especially for users who have held their devices for more than three years or whose devices (models below iPhone 15 Pro) are not capable of supporting Apple Intelligence.

From a pricing perspective, the "implicit" price increase achieved by eliminating the entry-level storage option for the Pro model will gradually raise the overall average selling price as iPhone shipments increasingly tilt towards the high-end market.

However, Goldman Sachs holds a neutral view on the impact of the iPhone 17 Air model. Although its slim form factor may attract some consumer interest, reports suggest that it may compromise on battery capacity and rear camera (single lens), which could reduce its appeal compared to the base model