Apple's iPhone 17 is coming, but headwinds abound

With Nvidia’s (NVDA) earnings officially in the rear view, the tech world now turns its attention to Apple (AAPL), which will host its annual fall event next week. Set for Sept. 9, the showcase is expected to include the launch of the company’s much-anticipated iPhone 17 Air.

A slimmed-down version of the iPhone, the Air will bring some of the biggest changes to Apple’s most important product in years, according to Apple soothsayer Mark Gurman. It could also help boost iPhone sales in the near term.

But Apple’s flagship product faces a number of headwinds, ranging from an expected price increase to a lack of premium camera features.

Apple’s iPhone Air is expected to be about 2 millimeters thinner than current iPhones, according to Gurman. That seems rather insignificant, but it should provide a noticeable difference for longtime iPhone owners.

The iPhone Air’s weight-loss journey could prove to have downsides, though. The phone is expected to come with just one camera rather than the two found on the standard iPhone and three on the Pro models, which could keep consumers from making the switch to the Air. After all, would you rather have a single camera or two or three with varying optical zoom options?

A skinnier frame could also mean the iPhone Air will have a smaller battery, another strike against the smartphone, unless Apple can get more juice out of a charge via software tricks.

Apple is also widely expected to raise the prices of its devices, with projections ranging from a $50 to a $100 price hike on iPhone 17 Air, and a $50 jump on iPhone Pro and Pro Max models.

That would put the price of the iPhone 17 Air, which is set to replace the $899 iPhone Plus, between $949 and $999. The iPhone 17 Pro would now cost $1,049, while the Pro Max would come in at $1,249.

Despite those potential downsides, Deepwater Asset Management managing partner Gene Munster says Apple should see a solid upgrade cycle with its latest generation of iPhones.

“The vast majority of sales, about 80% of sales, are going to be from people upgrading,” Munster told Yahoo Finance.

“And for them, it’s largely not about what the features are in a given year, it’s about what they were compared to the phone that they had, which is on average four years old. So they’re comparing it, in this case, it would be an iPhone 13 versus an iPhone 17,” he added.

The iPhone 17 could still thrive

Generally, new iPhone designs help drive a surge in consumer interest and overall sales. But according to BofA Global Research analyst Wamsi Mohan, that may not be the case for the iPhone 17 lineup.

“While prior form factor changes have driven a meaningfully higher next iPhone cycle, in our opinion, investor expectations for the benefit from a thin phone are more tempered,” Mohan wrote in an Aug. 25 investor note. “We model iPhones growing 1% [year-over-year] in [fiscal 2026] (to 235mn units), which is mostly in-line with [Wall Street] at 233 [million],” he added.

KeyBanc Capital Markets’ Brandon Nispel said that even though the iPhone 17 Air might offer a thinner design, he doesn’t think the change will be enough to get customers overly excited for the phone.

“The Plus model was never very popular … and the Air is probably just going to take the demand of the Plus and then probably pull some people from the standard and the Pro Max model, would be my guess,” Nispel told Yahoo Finance.

It’s not just that the iPhone 17 could pack a higher price or fewer cameras; tariff-driven sales in the early half of the year could hinder demand in the latter half of 2025.

“We had such a strong pull in demand; both Q1 and Q2 came in significantly above forecast,” explained Nabila Popal, senior research director for IDC’s Worldwide Device Tracker.

According to Popal, smartphone sales in China, one of Apple’s most important markets, are also expected to tumble in the second half of the year.

Despite all of that, both Munster and Popal say that iPhone 17 sales should grow versus iPhone 16 sales.

According to IDC, global smartphone shipments should increase 1% year over year, powered by a 3.9% improvement in iOS device shipments.

Munster says smartphone sales should increase in spite of so many headwinds, thanks, in part, to customers who purchased iPhones during the pandemic and are looking to upgrade. In 2021, iPhone sales grew 39% year over year, leaving a large pool of potential upgraders ready to grab an iPhone 17.

We’ll find out how consumers feel as the iPhone 17 is expected to hit stores later this month.

Email Daniel Howley at dhowley@yahoofinance.com. Follow him on X/Twitter at @DanielHowley.

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