London Daily

Focus on the big picture.
Thursday, Oct 02, 2025

Only one major analyst was not impressed by Apple's results and here's what has him worried

Only one major analyst was not impressed by Apple's results and here's what has him worried

Barclays’ Tim Long is worried that Apple’s average iPhone pricing is too low as more users go for the cheaper phones. In an effort to grow its subscriber base for its services business, Apple has been selling iPhones with lower prices. Apple released three new iPhones in September: the iPhone 11, iPhone 11 Pro and iPhone 11 Pro Max. The iPhone 11 starts at $699, $50 cheaper than last year’s iPhone XR.
Apple’s historically strong pricing power might be slipping, according to Barclays.

In an effort to grow its subscriber base for its services business, Apple has been selling iPhones with lower prices. Those prices may be too low, and too many consumers may be gravitating toward the cheaper options, according to Barclays, which expects this trend to continue.

“IPhone revenues were in-line, but we believe ASPs [average selling prices] were weaker,” Barclays IT hardware analyst Tim Long said in a note to clients Thursday. The note was titled, “Services Strength Masks ASP Pressure.”

Shares of Apple rose more than 1% on Thursday, a day after the company reported better-than-expected fiscal fourth quarter earnings and revenue despite a drop in iPhone sales. The technology giant posted earnings of $3.03 per share on revenue of $64 billion. Wall Street was expecting earnings of $2.48 per share on revenue of $62.99 billion, according to Refinitiv. The results got a boost from strong demand for iPads and AirPods as well as growth in Apple’s services business.

IPhone revenues came in at $33.36 billion, slightly higher than the $32.42 billion estimate, but Long said the average selling price of Apple’s iPhones will drop 10% year over year in the fourth quarter. Barclays now estimates a 12% average selling price decline in 2019 and a 6.5% average selling price decline in 2020.

Apple released three new iPhones in September: the iPhone 11, iPhone 11 Pro and iPhone 11 Pro Max. The iPhone 11 starts at $699, $50 cheaper than last year’s iPhone XR. The lower prices were supposed to attract and larger scope of customers to Apple’s services business.

Long was originally bullish on Apple’s lower pricing strategy. He said “the lower price points are helping Apple after a few challenging quarters.” But he said he didn’t realize average prices would come in this low as more consumers go for the cheaper phones.

“We have discussed the mix down in iPhones that has been occurring all year,” said Long. “ASP [was] worse than our model.”

Barclays has an equal weight rating on the stock and slightly raised Apple’s price target to $236 per share to $224 per share, which is lower than the $243.26 per share Apple closed at on Wednesday.

The company could also see rising costs if a U.S.-China trade deal falls apart, squeezing margins further, investors fear.

“We still see pressure on the iPhone business, and believe that supply chain data may start turning over the next month as compares get more challenging,” said Long.

Some analysts are bullish on the prospect of new 5G iPhones set to be released next year, but Long doesn’t think Apple will be able to charge enough without hurting demand.

The lower pricing trend “may present challenges for 5G, which we believe will carry at least $150 higher ASP,” he said.
Newsletter

Related Articles

0:00
0:00
Close
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
Nvidia Pledges Up to $100 Billion Investment in OpenAI to Power Massive AI Data Center Build-Out
U.S. Signals ‘Large and Forceful’ Support for Argentina Amid Market Turmoil
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
Vietnam Faces Up to $25 Billion Export Loss as U.S. Tariffs Bite
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Indonesia Court Upholds Military Law Amid Concerns Over Expanded Civilian Role
Larry Ellison, Michael Dell and Rupert Murdoch Join Trump-Backed Bid to Take Over TikTok
Trump and Musk Reunite Publicly for First Time Since Fallout at Kirk Memorial
Vietnam Closes 86 Million Untouched Bank Accounts Over Biometric ID Rules
×