Air is too expensive, Pro has better "cost performance," and the basic version "can receive subsidies in China" – JP Morgan comments on Apple's launch event: mixed feelings

Author: Dong Jing

Source: Hard AI

JP Morgan gave a "mixed" evaluation of Apple's fall 2025 launch event, believing that the favorable pricing of the iPhone 17 series is offset by the mild market outlook for the iPhone Air.

On September 9, JP Morgan stated in its latest research report that the pricing of the iPhone 17, 17 Pro, and 17 Pro Max remains favorable, while the newly launched iPhone Air may suppress sales expectations due to its high pricing.

The bank's analysts pointed out that although the iPhone Air, as "the thinnest iPhone ever," has innovative significance, the $999 price tag represents a significant increase compared to the previous Plus model's $899, and coupled with limited advantages compared to the Pro version, it is expected to struggle to drive a significant sales growth cycle.

In contrast, the Pro series models, with more comprehensive feature upgrades and a more attractive pricing strategy, are expected to be the main drivers for enhancing the product portfolio.

JP Morgan stated that the base model iPhone 17 maintains a starting price of $799, but the starting storage capacity has been increased to 256GB, making it eligible for subsidies in the Chinese market, which is expected to support Apple's continued recovery in the region.

JP Morgan maintains an "overweight" rating on Apple stock, believing that although there is uncertainty regarding the market outlook for the iPhone Air, the overall pricing strategy and feature upgrades of the product line still support a positive investment view.

iPhone Air Pricing Strategy Raises Sales Concerns

JP Morgan believes that the high pricing strategy of the iPhone Air may limit its market performance. This device, which is only 5.6 mm thick, is equipped with the A19 Pro chip and a ProMotion 120Hz display, but only features a single 48-megapixel rear camera, with a battery life of 27 hours, significantly lower than the 30 hours of the base model iPhone 17 and the 39 hours of the 17 Pro.

Analysts stated that despite the Air adopting a new design concept, its feature configuration appears to lack cost-effectiveness relative to the $999 price tag. Especially compared to the $1,099 17 Pro, the mere $100 price difference reveals significant gaps in camera configuration and battery life, which may affect consumer purchasing decisions.

Historical data shows that Plus series models typically account for only a mid-to-high single-digit percentage of total iPhone sales. JP Morgan expects that while the Air may achieve incremental improvements compared to Plus models, it is unlikely to meet the previous market's optimistic expectations for significant sales growth.

Pro Series Pricing Advantages Stand Out, Supported by Policies in the Chinese Market

The iPhone 17 series shows positive signals in its pricing strategy. The base model iPhone 17 maintains a starting price of $799, but the storage capacity has been increased from 128GB to 256GB. The starting price of the 17 Pro has increased by $100 to $1,099, mainly reflecting the increase in storage capacity, while the 17 Pro Max remains unchanged at $1,199 JP Morgan particularly emphasized that the pricing strategy of the iPhone 17 base model has significant market implications. The price of $799 combined with a starting storage of 256GB aligns with the subsidy policy requirements in the Chinese market, which will help Apple maintain its recovery momentum in China over the past few quarters.

Among the entire iPhone 17 product line, the upgrades for the Pro models are the most significant. The 17 Pro and 17 Pro Max not only maintain their pricing but also achieve substantial enhancements in functionality, including a comprehensive upgrade to the 48-megapixel triple-camera system and an expanded camera module design.

JP Morgan expects that the Pro models will be the main driving force behind the improvement of the product mix. The stronger upgrade potential combined with the maintained pricing strategy is likely to attract more consumers to choose high-end models, thereby increasing Apple's average selling price and profit margins.

Carriers Increase Trade-In Offers, Limited Innovation in Accessory Products

JP Morgan stated that major carriers in the U.S. have launched more generous trade-in offers for the iPhone 17 series compared to the iPhone 16 cycle. Specifically:

Verizon offers trade-in subsidies of up to $830/$1000/$1100/$1100 for the base model/Air/Pro/Pro Max, AT&T offers $800/$830/$1100/$1100, and T-Mobile provides a uniform subsidy of $1100 for all models.

In contrast, the trade-in policy when the iPhone 16 was released was:

Verizon offered $830/$930/$1000/$1000, AT&T offered $800/$800/$1000/$1000, and T-Mobile provided a uniform subsidy of $1000.

The analysts believe that these more favorable trade-in policies will help stimulate consumer upgrade demand.

In terms of accessory products, the Apple Watch Series 11 maintains a price of $399, with major updates including 5G connectivity, blood pressure monitoring, and hypertension notification features.

The Apple Watch Ultra 3 adds satellite connectivity, with a price maintained at $799. The AirPods Pro 3 include real-time translation and heart rate sensor features, with a price maintained at $249.

JP Morgan believes that although these accessory products have significant innovations in functionality, their impact on the overall investment logic is relatively limited, with the main driving force still coming from the performance of the iPhone product line.