Can Apple's Latest iPhones and iPhone Air Improve Competitive Prowess?

Apple AAPL updated its iPhone product line with the new iPhone 17, iPhone 17 Pro, and iPhone 17 Pro Max. The company also launched iPhone Air, its thinnest iPhone (5.6 mm) ever. 

iPhone 17 features the new Center Stage front camera for better selfies, 48MP Fusion Main camera with an optical-quality 2x Telephoto, and a new 48MP Fusion Ultra-Wide camera. The 6.3-inch Super Retina XDR display with ProMotion is bigger and brighter. The new iPhone offers better scratch resistance due to the new Ceramic Shield 2 and is powered by the A19 chip for higher performance and longevity. iPhone 17 Pro and iPhone 17 Pro Max are powered by A19 Pro and have enormous battery life.

The latest iPhone Air features a 6.5-inch Super Retina XDR display with ProMotion up to 120Hz. The back of the iPhone Air is now protected with Ceramic Shield, and the front cover uses Ceramic Shield 2, delivering three times better scratch resistance. iPhone Air is the most power-efficient due to three Apple-designed A19 Pro, N1 (wireless networking chip), and C1X (cellular modem) chips. 

The updated iPhone portfolio is expected to boost iPhone sales, which increased 13.5% year over year to $44.58 billion and accounted for 47.4% of third-quarter fiscal 2025 total sales. 

Our model pegs fiscal 2025 iPhone sales to $208.76 billion, up 3.8% from 2024’s reported figure of $201.18 billion.

Apple Faces Tough Competition in the Smartphone Space

AAPL is facing stiff competition from Chinese vendors, including Huawei, vivo, and Xiaomi XIACY. Samsung and Alphabet GOOGL are major non-Chinese smartphone providers. 

According to to IDC’s second-quarter 2025 data, Samsung’s shipments hit 58 million, up 7.9% year over year. In terms of market share, Samsung leads with a market share of 19.7%, while Apple trails with 15.7% and Xiaomi with 14.4%. Xiaomi shipped 42.5 million smartphones in the second quarter of 2025.

Alphabet is expanding its Pixel portfolio with the latest Pixel 10, Pixel 10 Pro and Pixel 10 Pro XL devices, which are powered by the Google Tensor G5 chip and Alphabet’s newest Gemini Nano model. These devices feature a refined camera bar and Pixelsnap for built-in Qi2 wireless charging. Alphabet launched Pixel 10 Pro Fold, its most durable foldable phone yet, and features a new gearless hinge, which is twice as durable as Pixel 9 Pro Fold’s. Pixel 10 Pro Fold is also the first foldable with a built-in Qi2 charging feature.

AAPL’s Share Price Performance, Valuation & Estimates

Apple shares have dropped 6.4% year to date, underperforming the broader Zacks Computer and Technology sector’s return of 16.8%.

Apple Stock’s Performance

The AAPL stock is trading at a premium, with a forward 12-month price/earnings of 30.09X compared with the broader sector’s 28.27X. AAPL has a Value Score of F.

AAPL Valuation

The Zacks Consensus Estimate for fiscal 2025 earnings is pegged at $7.35 per share, up a couple of cents over the past 30 days, suggesting 8.9% year-over-year growth.
 

Apple Inc. Price and Consensus

Apple Inc. price-consensus-chart | Apple Inc. Quote

Apple currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research