Apple's $1,999 iPhone Duo Came Too Cheap for Wall Street

Apple Inc. (NASDAQ:AAPL) priced its first foldable iPhone below Wall Street’s expectations.

For the analysts covering the stock, that is exactly the problem.

The $1,999 iPhone Duo drew broad praise. Apple unveiled it Wednesday at the “Surprise and Shine” event, the first major product launch under CEO John Ternus.

The worry is what cheaper-than-expected phones do to Apple’s profit on each device.

BofA Likes The Duo, Not The Math Behind

Bank of America Securities analyst Wamsi Mohan reiterated a Buy rating but cut his price target to $370 from $380. The new target is still 14.3% above Thursday’s price.

“In our opinion, iPhone Duo stole the show,” Mohan said.

He said the foldable screen brings iPad-like productivity to a phone, which opens a bigger market for Apple. He also said the new form factor could become more mainstream over time.

Before the event, BofA had expected a $2,099 foldable and price hikes of $150 to $200 on the Pro models. Instead, the Duo landed at $1,999. The iPhone 18 Pro and Pro Max rose $100 each, to $1,199 and $1,299.

Cheaper phones could sell more.

They could also earn less.

Mohan raised his iPhone unit forecast by 2 million for fiscal 2026 and by 5 million for fiscal 2027, to 256 million in each year. He now sees 54 million iPhones shipped in the September quarter, up from 52 million.

He also cut his average selling price assumption by $14 for fiscal 2027, to $1,099.

That figure is the typical price Apple collects per iPhone.

With memory and component costs rising, a lower price squeezes gross margin, which is the share of each sales dollar Apple keeps after paying to build the product.

The result is that BofA’s fiscal 2027 earnings per share estimate falls to $9.46 from $9.92. The $370 target is based on 37 times BofA’s calendar 2027 EPS estimate of $9.98, down from $10.32.

TD Cowen Stays Bullish, Rosenblatt Stays Cautious

TD Cowen kept a Buy rating and a $400 price target, implying 23.6% upside.

The firm said the modest price increases help affordability but could create more headwinds for hardware gross margin over the coming year. It estimates Apple will ship roughly 6 million Duo units in the second half of 2026.

Rosenblatt analyst Barton Crockett maintained a Neutral rating and a $303 target, about 6.4% below Thursday’s price.

Crockett said Apple’s light-touch pricing could weigh on gross margins as memory costs climb.

Three firms. Three different targets.

One shared worry.

How Far Apart Wall Street Stands on Apple

Apple carries a consensus Buy rating from 29 analysts tracked by Benzinga Analyst Ratings.

Their average price target is $335, which implies 3.5% upside from Thursday’s price.

Recent targets range from $245 at Barclays to $400 at TD Cowen and Rothschild & Co.

Photo courtesy: Apple