Apple Unveils iPhone 17 Series: Slim iPhone Air and Steady Pricing Amid Tariff Pressures

Apple Unveils iPhone 17 Series with New iPhone Air

Apple (AAPL.O) has announced the launch of the new iPhone 17 series, which includes a thinner iPhone Air. Despite the continued impact of tariff policies imposed by former U.S. President Donald Trump, Apple has maintained original pricing, even though these tariffs have eroded the company's profits. The iPhone Air comes with a high-density battery and a new processor, starting at a price of 7999 yuan. Wall Street has been closely watching whether Apple would raise iPhone prices or offset cost pressures by increasing prices for high-storage versions. CEO Tim Cook described the device as “the biggest leap ever for iPhone.” Apple calls it the most durable iPhone to date, featuring an A19 Pro chip specially optimized for improved energy efficiency and adapting to the thinner battery. Competitors like Samsung have already introduced phones focusing on ultra-slim designs.

Market Impact and Competition

Dan Ives of Wedbush Securities believes that Apple's new iPhone could trigger a new upgrade cycle. However, Ryuta Makino, a research analyst at Gabelli Funds, believes that the launch was not surprising enough to drive a “substantial upgrade cycle” or boost the stock price. As analysts predicted, the iPhone Air falls into the mid-price range among Apple's various products. Apple also launched the iPhone 17 and iPhone 17 Pro, the latest upgrades to its flagship smartphones, as well as the next generation of AirPods Pro wireless headphones and an Apple Watch with blood pressure monitoring. The base iPhone 17 with 256GB of storage starts at 5999 yuan, the same price as the previous iPhone 16 with 128GB of storage. The iPhone 17 Pro with 256GB starts at 8999 yuan, the same as the previous year, but the smaller capacity option found in the iPhone 16 Pro has been removed.

Pricing Strategy and Market Challenges

Apple also did not raise prices for the Apple Watch and the new AirPods Pro 3. These pricing strategies indicate that Apple is willing to absorb tariff costs to fend off challenges from Samsung, Google, and domestic Chinese competitors. Although Apple expects these tariffs to cause cost pressures of over $1 billion for the company in the current fiscal quarter. After the announcement of the new product prices, Apple's stock fell by 1.6%. Amit Daryanani of Evercore ISI believes that Apple's new products may “reinvigorate Apple’s user base and become the start of a multi-year iPhone development roadmap.” Daryanani maintained an outperform rating on the stock and raised its target price from $250 to $260. Tom Mainelli, head of IDC's device and consumer research division, stated, “They are leveraging economies of scale to maintain price stability. I think that Apple, like other tech companies, especially in the U.S., is very aware that tariffs will impact consumers’ purchasing power in the second half of the year. So they kept prices unchanged, allowing consumers to swap devices at the same price as last year as much as possible.”

Competition in the Foldable Phone and AI Markets

The iPhone Air will directly face off against the Samsung Galaxy S25 Edge. Analysts say this new product may be Apple’s first step into the foldable phone market, while Samsung’s foldable phones have already entered their seventh generation. Launching a foldable phone is crucial for Apple to attract consumers in the Chinese market, where Chinese consumers prefer foldable phones, and Apple’s market share is gradually being eroded. PP Foresight analyst Paolo Pescatore said, “This new device will inject long-awaited freshness into the iPhone.” He believes that “this time, the new and significantly upgraded iPhone product line is impressive, positioning Apple strongly to face various consumer groups.” In this launch, Apple did not comment much on how to keep up with the AI developments of companies like Google. Google used its latest flagship phones to showcase the capabilities of the Gemini AI model. Apple is relying on its partnership with OpenAI, the developer of ChatGPT, to integrate a large number of AI functions into its devices. eMarketer analyst Gadjo Sevilla pointed out that Apple “avoided the core battlefield of AI but emphasized its long-term innovations in AI hardware, especially in chips and device-level integration.”

New Components and Advanced Technology

Apple said that the iPhone Air will also feature a new chip called “N1” for Wi-Fi communications, and a “C1X” modem for cellular data connections. These functions were previously using chips from Broadcom (AVGO.O) and Qualcomm (QCOM.O). After Apple’s announcement, shares of the two chipmakers fell by 2.3% and 1.1% respectively. Tim Millet, one of Apple’s chip heads, said at the launch event at the company’s headquarters in Cupertino: “This is already MacBook Pro-level computing power, but it’s in an iPhone.” The iPhone Air will have two cameras and remove the physical SIM card slot to make way for more battery. Apple also said that the base iPhone 17 will have a brighter, more scratch-resistant screen, a front-facing selfie camera, and a redesigned sensor shape to improve horizontal selfie effects. The new AirPods Pro 3 will support real-time voice translation. When both parties wear the headphones, the headphones can translate each other's conversation content almost in real time. The blood pressure monitoring function is still awaiting regulatory approval. Apple said that although this feature cannot detect all cases of high blood pressure, it is expected to send a reminder to 1 million people and will be launched in 150 countries.