Gene Munster Says Apple's New iPhone 17e, iPad Air Could Lift June Quarter Growth Above Street Estimates

Gene Munster, Managing Partner of Deepwater Asset Management, said that the unveiling of the new iPhone 17e and iPad Air is expected to significantly augment the revenue growth of Apple Inc. (NASDAQ:AAPL) for the June quarter.

The market had initially forecasted a 7% revenue growth for Apple. However, the introduction of these new devices could potentially push this figure to 9%, contrary to market expectations of a slump in June revenue guidance, said Munster on Monday.

Revenue Boost At The Cost Of Margin?

The iPhone 17e and iPad Air now offer double the storage while maintaining their $599 entry-level price. According to Munster, this suggests it is effectively managing memory cost pressures, even if it means taking a margin hit, something the company had indicated in its past earnings call.

Munster said the iPhone 17e, which typically makes up 15–20% of annual iPhone unit sales (and closer to 20% when newly launched), usually drives about 15% year-over-year unit growth for a few quarters. Despite having a 27% lower average selling price, it could boost June-quarter iPhone revenue by around 2%, lifting expected overall company revenue growth by roughly 1 percentage point.

He estimates that the iPad makes up about 7% of total sales, with the iPad Air accounting for nearly half of that. A 15% boost in Air sales would add roughly 1% to overall revenue.

Combined with a similar 1% lift from the iPhone, this could push June revenue growth closer to 9%, above the Street's 7% forecast.

Munster sees the situation as positive and doesn't expect any “negative surprises” on the earnings side or concerning commentary about its impact on the June quarter.

Devices For A Wider Audience

The iPhone 17e, the latest addition to the iPhone 17 family, was announced by Apple on Monday as a more affordable option for customers. The device, priced at $599, offers 256 gigabytes (GB) of storage, twice the entry storage of its predecessor at the same price point. The phone runs on Apple's new 3-nanometer A19 chip and includes the C1X in-house modem, which Apple says is up to twice as fast as the C1 in the iPhone 16e.

The new iPad Air comes with 12GB of unified memory, a 50% increase from the previous model, and 120GB/s memory bandwidth. Powered by the M4 chip, it's up to 30% faster than the M3 version and up to 2.3 times quicker than the M1 model. It also features Apple's N1 wireless chip.

According to reports, a few more products are lined up for release on March 4, including a MacBook Pro featuring M5 Pro and M5 Max chips and a 12th-generation iPad, among others.

Apple has posted record iPhone sales in recent quarters, and the upcoming launch of Apple Pay in India could unlock another leg of growth — particularly in the affordable segment. Apple Pay's seamless payments ecosystem may make even its more affordable iPhone models more attractive to Indian consumers. Moreover, the added integration between Apple Pay and devices such as iPads, Macs and Apple Watches could benefit the entire ecosystem.

Benzinga's Edge Rankings place Apple in the 94th percentile for quality and the 65th percentile for momentum, reflecting its strong performance in both areas. Benzinga’s screener allows you to compare Apple’s performance with its peers.  

AAPL Price Action: On a year-to-date basis, Apple stock declined 2.32%, as per Benzinga Pro. On Monday, it edged 0.20% higher to close at $264.72.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image via Shutterstock