Apple's new foldable iPhone Duo was priced at $1,999, below analyst expectations of $2,099, leading to concerns about potential gross margin compression despite increased unit forecasts. This pricing strategy, while potentially boosting sales volume, is seen by some analysts as a risk to profitability due to rising component costs.
Apple launched its first foldable iPhone, the iPhone Duo, at $1,999, which was $100 lower than Wall Street's anticipated price. This lower pricing, coupled with modest price increases on other Pro models and rising memory/component costs, has led analysts to cut average selling price (ASP) assumptions and earnings per share (EPS) estimates for Apple. While some analysts like BofA and TD Cowen maintain 'Buy' ratings due to potential for increased unit sales and market expansion, the shared concern across the board is the potential negative impact on Apple's gross margins. This presents a short-term risk for AAPL's profitability metrics, though the long-term opportunity lies in expanding market share with the new form factor.