Don’t Overlook This Critical Pricing Detail From Apple’s iPhone Announcement

Apple's latest iPhone reveal just dropped a pricing bombshell that's flying under everyone's radar.

THE HIDDEN COST SHIFT

While everyone's busy drooling over the new titanium chassis and camera upgrades, Apple quietly re-engineered their pricing strategy. Base models maintain last year's sticker price, but the premium configurations? They just jumped another 10%.

THE FINANCE JAB

Meanwhile, crypto's sitting over here delivering actual 10x returns while Apple investors get excited about a 2% dividend yield. Priorities, people.

THE BOTTOM LINE

Apple's playing the long game—conditioning consumers to accept premium pricing while the tech barely moves the needle. Smart business? Absolutely. Good value? That's becoming increasingly debatable.

Image source: Getty Images.

Recent results point to a healthier iPhone backdrop

Apple's fiscal third quarter showed the Core engine is running well again. Total revenue rose to $94.0 billion, up 10% year over year, while iPhone revenue climbed 13% to $44.6 billion from $39.3 billion a year ago. Services revenue reached $27.4 billion, also a record for the June quarter. All of this pushed earnings per share for the quarter up 12% year over year. This mix shows iPhone still doing the heavy lifting while services keeps compounding on a larger base.

Apple CEO Tim Cook captured the tone in the company's fiscal third-quarter release in late July: "Today Apple is proud to report a June quarter revenue record with double-digit growth in iPhone, Mac and services and growth around the world, in every geographic segment." That comment, paired with an all-time-high installed base noted by the CFO, underscores the company's momentum as new models arrive later this month.

Apple stock's valuation reflects high expectations. As of Tuesday's close, the stock traded around the mid-30s on a trailing price-to-earnings basis and sported a market cap NEAR $3.5 trillion. Premium valuation multiples require sustained growth, so whether the iPhone lineup can support another leg higher matters for returns from here.

A Pro price bump and a new Air could lift iPhone revenue

The most consequential change this fall may be simple: Apple lifted the iPhone 17 Pro's starting price to $1,099 from $999 for last year's 16 Pro. Even before any unit growth, that change can nudge average selling prices higher, especially if Pro models continue to draw enthusiasts who want the iPhone models with the best cameras and performance. Apple also doubled the entry storage on 17 Pro to 256GB, which supports the higher entry price while still benefiting revenue recognition.

Additionally, Apple introduced iPhone Air -- the thinnest iPhone yet -- with a polished titanium frame and new Ceramic Shield 2 front and back that Apple says is more scratch- and crack-resistant than prior models. Priced below the Pro line at $999, Air offers a sleeker and tougher design that should appeal to mainstream upgraders who have waited. Together with iPhone 17, this broadens the ladder for buyers and may support both units and richer configurations. Preorders begin Friday, with availability next week.

These product dynamics line up with the fundamentals Apple reported in late July: iPhone is growing again, services is setting records, and the installed base is larger than ever. A higher Pro entry price, a compelling non-Pro option in Air, and the usual mix of trade-in and carrier promotions could translate into higher iPhone revenue in fiscal 2026, potentially in the double digits, if Apple sustains healthy Pro demand and nudges more mainstream buyers to upgrade. The risks are clear, including price sensitivity at the high end, macro softness in key regions, and intense competition. But Apple's scale, brand strength, and rapidly growing services business help cushion those pressures.

In short, Apple just made its most popular premium phones more valuable -- and more expensive -- while adding a new, tougher design at a slightly lower price point than Pro. If that combination drives strong Pro mix and steady upgrades, it can lift average selling prices and total iPhone revenue next year. With services already at record levels and the installed base expanding, that is a reasonable path for the stock to maintain a premium valuation over time, allowing the stock price to grow with earnings growth.