Apple’s iPhone Air gross sales in focus at This fall earnings

Apple’s Thursday earnings report is essential for traders as a result of it consists of the primary official gross sales figures for the iPhone 17.

The report covers gross sales by way of the tip of September, which features a little greater than a weeks price of gross sales information for the most recent Apple smartphones that went on sale Sept. 19. In current weeks, Wall Avenue has been boosting Apple inventory as a result of it seems to be just like the iPhone 17 is a success based mostly on early business estimates.

However traders shall be watching intently about what Apple says concerning demand to see if this 12 months finally ends up being a “super-cycle,” or the primary 12 months of progress after iPhone income peaked in fiscal 2022. Analysts polled by FactSet count on that Apple surpassed that top mark in fiscal 2025.

Third-party estimates from analysts and business researchers have signaled that iPhone gross sales are up this cycle, particularly for the entry-level iPhone 17, which bought the quickest chip and a display screen with a sooner refresh price, and the iPhone 17 Professional fashions, which have a full aluminum body and improved battery life.

However the latest iPhone mannequin, the iPhone Air, does not seem like promoting properly thus far.

“Some studies have highlighted a extra muted iPhone 17 Air uptick than we imagine some had initially anticipated,” Wells Fargo analyst Aaron Rakers wrote this month.

It is a acquainted story for Apple, which sees the strongest progress when it introduces new iPhone fashions that broaden the lineup. However because it went to a four-phone lineup in 2020, Apple has struggled with the fourth telephone’s gross sales, which have lagged behind the fundamental iPhone and the Professional fashions. Since 2020, Apple swapped out the “Mini” iPhone for a “Plus” iPhone with an even bigger display screen, and now, it is attempting the “Air.”

Whereas Apple does not separate gross sales numbers for particular person gadgets, CEO Tim Cook dinner and CFO Kevan Parekh typically present some coloration throughout earnings calls about product launches in the course of the quarter and the way a lot demand the corporate is seeing.

When Apple launched the $999 iPhone Air in September, Tim Cook dinner known as it an “iPhone that looks like a chunk of the long run.” Worth-wise, it lands between the iPhone 17, beginning at $799, and the iPhone 17 Professional, which begins at $1,099.

The iPhone Air is thinner and lighter than Apple’s different telephones, however that additionally comes with compromises. It solely has one digicam lens, and its battery life is shorter than its siblings. Nonetheless, it is the one iPhone this 12 months with a big design change, and opinions have been optimistic.

China gross sales might additionally enhance the mannequin. It did not go on sale in China till earlier this month, and it bought out in minutes, in accordance to the South China Morning Put up.

Nonetheless, patrons seem to desire what they’re already acquainted with.

Nikkei, a newspaper in Japan, reported final week that Apple “drastically” slashed iPhone Air part orders with its companions, however is boosting orders for its different telephones.

Ming-Chi Kuo, a TF Worldwide Securities provide chain analyst identified for forecasting future Apple strikes, adopted that report by saying that the iPhone Air had fallen wanting expectations.

“This means that the prevailing Professional sequence and commonplace fashions already cowl the vast majority of high-end consumer demand properly, leaving little room to carve out new market segments and positioning,” Kuo posted on social media.

In some ways, the iPhone Air underperforming will not be a sea change for the corporate.

Since 2020, Apple has launched 4 new telephones within the fall. However one of many 4 new fashions has constantly lagged its siblings in gross sales, and Apple has swapped the mannequin out through the years to search out one thing that works.

Earlier than the Air, it was the iPhone “Plus,” in the course of the lineup with the identical specs as the primary iPhone however with a bigger display screen. It was priced at $899. Apple tried that from 2022 by way of 2024.

Goldman Sachs analysts mentioned that lead instances, or how lengthy Apple says it is going to take to ship a tool on its web site, advised that the iPhone Air had comparable demand to its predecessors.

“Lead instances for the iPhone Air have been initially under the iPhone 16 Plus, however have now surpassed these of the iPhone 16 Plus and are slightly below these of the iPhone 15 Plus,” wrote Goldman Sachs analyst Michael Ng in a word this month.

Earlier than that, Apple’s fourth telephone was the iPhone Mini, which value lower than the primary iPhone when it was launched in 2020, however customers did not flock to its smaller display screen.

Analysts say that the iPhone Air might be a constructing block in the direction of a extra various lineup that might embrace a folding iPhone. Its skinny design resembles what half of a folding telephone might seem like, tech critics say. And the truth that the iPhone Air does not have a quantity suggests it won’t get annual updates anyway.

If Apple’s different iPhones are seeing surging gross sales, it won’t matter to traders if the Air is lagging, particularly if new designs at the least preserve the lineup feeling contemporary.

“We imagine Apple has the flexibility to take care of the relevance of smartphones by way of type issue updates to iPhone,” wrote Ng, the Goldman analyst. “For instance, after the debut of the thinner iPhone Air type issue this 12 months, Apple is anticipated to launch its first foldable iPhone in 2026, adopted by an all-screen show iPhone in 2027.”

Apple did not reply to a request for remark.

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