Apple's 2026 fall event "Surprise and Shine" was the first major new product launch since John Ternus became CEO. JPMorgan believes the event was broadly in line with expectations, but Apple's approach to pricing is more noteworthy than a simple price increase.
The starting prices of the iPhone 18 Pro and 18 Pro Max rose to $1,199 and $1,299, respectively, both up $100 from the previous generation, with base storage still at 256GB. This increase is in line with JPMorgan's previous baseline forecast and below the more aggressive pricing some investors feared due to rising memory costs.
However, Apple did not fully absorb the costs itself, instead placing larger increases on higher-storage versions.
The 1TB versions of the iPhone 18 Pro and Pro Max are priced at $1,799 and $1,899, respectively, up $300 year-over-year; the 2TB versions reach $2,399 and $2,499, respectively, with the Pro adding a 2TB option for the first time, while the highest-capacity Pro Max version rises $500 from the previous generation.
The markup between different storage capacities widened from $200, $200, and $400 in the previous generation to $200, $400, and $600. JPMorgan believes this is the main way Apple is directly passing on memory costs.
Considering that Pro Max users typically prefer higher-capacity versions, Apple's current product mix may tilt further toward higher-priced models. As a result, although the entry-level version rises by only $100, the blended average selling price increase for the Pro series could still exceed $100.
Hardware upgrades also support the price increase. The iPhone 18 Pro series is equipped with the A20 Pro chip built on a 2-nanometer process and introduces a new vapor chamber, boosting sustained performance by up to 40%; video playback battery life for the two models rises from 33 hours and 39 hours to 36 hours and 45 hours, respectively, and both main cameras are upgraded to 48-megapixel cameras supporting physical variable aperture.
Apple's in-house C2 baseband also covers the entire fall product line for the first time. JPMorgan believes that in-house chips and vertical integration can help Apple reduce the cost of some components, leaving buffer room for rising material prices such as memory.
Apple is raising prices, but monthly payments are barely changing
The key to JPMorgan's bullish view on this cycle's sales is not the $100 increase itself, but how Apple reduces consumers' perception of the price hike.
The iPhone 18 Pro becomes the first new product included in the Apple Upgrade program. This Klarna-backed leasing service offers two main options: the 256GB version can be paid over 24 months at $34.99 per month, or over 12 months at $49.99 per month.
Under the 24-month plan, the amount paid by the user during the lease term is roughly equivalent to 70% of the retail price, and upon expiration, the user can choose to upgrade, buy out, or return the device. For consumers, the focus of the decision shifts from the $1,199 full device price to a cash outlay of a few dozen dollars per month.
Carriers are also offering relatively generous trade-in subsidies. AT&T and T-Mobile offer up to $1,200 in credits for iPhone 14 and newer models, while Apple's official trade-in credit amount reaches up to $885.
JPMorgan believes that leasing, carrier subsidies, and trade-ins can offset most of the list price increase, keeping the actual monthly spending of upgrading users roughly at last year's level. This allows Apple to raise ASP and absorb memory costs while controlling the impact of price increases on sales.
In other words, Apple hasn't given up on raising prices—it's just trying to make consumers feel it as little as possible.
The $1,999 Duo could be the biggest expectation gap this cycle
Compared with the Pro series, which met expectations, the first foldable iPhone Duo is the true focus of this launch event.
The Duo features a 7.6-inch inner display and a 5.4-inch outer display, with the inner screen area roughly 50% larger than that of the iPhone 18 Pro Max. Apple uses a nano-texture surface to reduce the visibility of the crease and a Grade 5 titanium frame, making it the thinnest iPhone when unfolded.
Its 256GB version starts at $1,999, while the 512GB, 1TB, and 2TB versions are priced at $2,199, $2,599, and $3,199, respectively. Compared with the Samsung Galaxy Z Fold8, which starts at $1,899, the Duo is only $100 more expensive.
JPMorgan believes this price is more attractive than the market had previously expected. For high-end users already accustomed to the Apple ecosystem, $1,999 may not pose a significant barrier; for Android foldable users, the smaller price gap also leaves room for switching to Apple.
More importantly, Apple is trying to shift the focus of competition from hardware specifications to software experience. The Duo's operating system can automatically adjust the interface based on the folding angle and half-folded posture. Apps such as Zoom, Slack, and Netflix have already been adapted through new APIs, and Apple Pencil support will launch later this year.
This reflects Apple's core advantage over existing Android foldables: rather than simply adding a large foldable screen, it uses its integrated hardware and software capabilities to redesign how apps interact across different screen states.
The Duo will open for pre-orders on October 16 and officially go on sale on October 23. The market currently expects sales of about 10 million units in 2026, and JPMorgan believes actual performance could exceed that expectation.
Apple Watch begins competing head-on in AI hardware
Apple also released the Apple Watch Series 12 and Ultra 4, priced at $399 and $799, respectively, without following the iPhone in raising prices.
Both products are equipped with the S11 chip and feature a redesigned health sensing system. Heart rate readings have increased to once every five seconds, and heart rate variability data updates at a minimum of once every five minutes, thereby supporting a new body status score.
But JPMorgan is more focused on the new "Audio Intelligence" feature added to the Apple Watch.
Among them, Live Rewind can transcribe what the user has just heard; Siri Recap can record conversations as set by the user and generate summaries and key points via AI. Apple states that the related features use end-to-end encryption and do not save raw audio.
JPMorgan believes that Siri Recap may officially push the Apple Watch into the AI wearable device category. In the face of competition from new products such as AI recording hardware and smart glasses, the Apple Watch is no longer just a health monitoring device, but will also become a portable information recording and processing terminal.
AirPods price cuts show Apple still has room for cost adjustment
AirPods 5 comes in two versions: the basic version with active noise cancellation is priced at $129, the same price as the previous generation AirPods 4 without active noise cancellation; the $149 version adds a wireless charging case, longer battery life, and volume adjustment by sliding on the stem, and is $30 cheaper than the previous generation ANC version.
While the iPhone has raised prices due to rising memory costs, the Apple Watch has maintained its original price and AirPods have actively cut prices, indicating that Apple is not facing pressure to raise prices across all product lines at the same time.
JPMorgan believes that Apple can offset part of the increase in material costs through component cost reductions, product redesigns, and self-developed chips. The savings can be used to maintain prices for some products, strengthen feature configurations, or subsidize new products of greater strategic significance.
JPMorgan's judgment: the new round of growth does not rely only on price increases
JPMorgan maintains an "overweight" rating on Apple. Its core judgment is not that Apple can rely on price increases to achieve one-time revenue growth, but that the company is opening three growth paths at the same time.
The first is ASP growth brought by price increases in the Pro series and a higher proportion of high-capacity models; the second is support for sales from leasing, subsidies, and trade-ins; the third is the entirely new high-end product category created by Duo.
On this basis, the Siri AI features entering the testing phase in mid-September are expected to further enhance the appeal of new models for upgrades. If sales growth, ASP increases, and the rollout of AI features are all realized at the same time, Apple may usher in a more complete iPhone revenue growth cycle than simple price increases alone.
Next, what the market needs to watch is not the launch event itself, but the initial pre-order data and changes in supply chain orders. JPMorgan expects that early sales feedback may lean positive and become the next catalyst for Apple's stock price.
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