Folding iPhone makes Apple AI growth story more credible
One of the most exciting Apple product launches in years has potential to turbocharge growth at the iconic tech company. City writer Graeme Evans explains why.
10th September 2026 15:30
by Graeme Evans from interactive investor
Apple CEO John Ternus with the iPhone Duo yesterday at the company’s corporate headquarters Apple Park in Cupertino, California. Photo: Benjamin Fanjoy/Getty Images.
Apple Inc (NASDAQ:AAPL) shares today backed up this year’s gains after the tech giant unveiled the “most transformational” change to the iPhone since the original was launched in 2007.
The foldable iPhone Duo, which is set for launch on 23 October with a starting price of $1,999 (£1,479), was the centrepiece of Apple’s Surprise and Shine event.
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Hosted by new chief executive John Ternus, the event also featured the debut of the iPhone 18 Pro and Pro Max models alongside the integration of deeper AI-enabled features.
Morgan Stanley said the presentation contained far more innovation than in previous September product launches, adding that Apple’s broader product plus software and AI strategy was becoming “more exciting and differentiated”.
It added: “Apple is repositioning the iPhone as an intelligent personal hub, with the Duo and Siri AI at the centre of this strategy.” Together with continued product innovation and pricing tailwinds, it forecast above-trend growth heading into the 2027 financial year.
The bank has a price target of $360 a share, which represents upside of 13% on today’s level of $319.63.
A multiple of 35 times forecast earnings, well above the five-year average of about 29 times, meant Wall Street expectations were high ahead of yesterday’s event.
Shares closed slightly lower but then rallied in today’s opening dealings, meaning they are about 18% higher year-to-date and 40% above their position of a year ago.
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Morgan Stanley said Apple’s acceleration of hardware and software innovation was headlined by the significant performance leap of its new A20 chips as well as the iPhone Duo.
It added that the foldable iPhone felt, looked and behaved like the most innovative device to come out of Apple in years.
The bank said: “While many of its productivity and multitasking functions have existed for years on competing foldable devices, Apple’s integration of hardware, software, and silicon delivers a notably more polished user experience that we think differentiates from peers.”
While an expensive device, it said the starting price of $1,999 was meaningfully below some expectations of between $2,300 and $2,500.
The bank added that improvements in performance, camera and battery life meant the new iPhone Pro line-up represented a more meaningful leap than recent Pro cycles.
It said the relatively modest $100 price increase to a starting price of $1,199 suggested Apple was prioritising upgrade volume and gross profit dollars over pure margin preservation. In addition, Siri AI is set to make the iPhone a centralised intelligence hub.
As 57% of the iPhone installed base own a device older than iPhone 15 Pro and 87% can’t run the most complex Siri AI workloads, the bank said this innovation has the potential to underpin multiple years of above-trend growth - making an ‘Apple AI’ bull case now more feasible.
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