Gene Munster reports remarkably long lines at Apple stores on the iPhone Duo’s launch day despite its high price point. This strengthens his confidence in a 20 million unit FY27 forecast (about 7% of total iPhone units) — well above Street expectations of ~12 million. The incremental 8 million units, driven by customers switching from ~$1,200 ASP phones to the Duo’s ~$2,200 ASP, would add roughly $8 billion to iPhone revenue and lift FY27 iPhone growth to 13% versus the Street’s 10%. Even as a fractional part of the lineup, Munster argues the Duo is a meaningful new lever that could boost overall iPhone revenue growth by 3% in FY27 and 5% in FY28.
My initial read on the first hour of the Duo launch is that lines are surprisingly long given the high price point. My confidence in my estimate calling for 20m units in FY27 (7% of total iPhone units) inched up after this morning. The Street is looking for around 12m. That 8m incremental units should add about 3% to overall iPhone growth in FY27 (Street currently looking for 10%). The 3% upside comes from getting 8m people to switch from a $1.2k ASP phone to a $2.2k ASP phone, adding $8B to the Street’s FY27 iPhone revenue estimate of $279B. I expect iPhone to grow at 13% in FY27, vs. the Street at 10%…
I believe the reasonable takeaway is that the Duo is off to a solid start. It’s important to note that Wall Street expects this to be a niche product accounting for about 4% of iPhone units in FY27 and 7% of revenue. I’m more optimistic and expect Duo to account for 8% of units and 16% of revenue. Either way, the Duo will play a smaller role in the broader iPhone family in the following fiscal year. Looking out to FY28, I expect it will play a more significant role in the lineup.
The bottom line is Apple has discovered a new lever in the iPhone growth equation that should help boost overall revenue growth by 3% in FY27 and 5% in FY28. The Street is currently looking for 10% iPhone growth in FY27 and 8% in FY28. So I believe the Duo will slightly bump up those growth rates.
MacDailyNews Take: Even Gene might be a bit low on his expectations. It’ll all hinge on how many units Apple can get assembled!
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