Deepwater Management‘s Gene Munster anticipates a revenue boost for Apple Inc. (NASDAQ:AAPL) in FY25, driven by the newly launched iPhone 16e.
What Happened: On Wednesday, Munster posted his insights on Apple’s latest offering, iPhone 16e on X. He highlighted three key takeaways from the new model, which he believes will contribute to an increase in iPhone revenue for FY25.
According to Munster, the iPhone 16e’s starting price of $599, is higher than the iPhone SE’s launch price at $429 but lower than the iPhone 16 at $799. This pricing strategy positions the 16e as the most affordable model that supports Apple Intelligence.
Munster also predicts that the 16e will account for approximately 10% of Apple’s revenue, surpassing the SE’s current 7% contribution. He suggests that this incremental revenue could exceed the current Wall Street expectation of 1% iPhone growth in FY25. Muster anticipates a growth above 3% being more likely.
Lastly, Munster notes that the 16e will be the first iPhone model to feature Apple’s own cellular modem chip, a move that allows it to step away from Qualcomm Inc. (NASDAQ:QCOM). Munster also expects this chip to be a part of iPhone 17 due this fall. Overall, he anticipates these developments to slightly enhance Apple’s gross margins in FY26.
Why It Matters: Munster’s predictions come in the wake of recent reports suggesting that Apple’s introduction of artificial intelligence (AI) features in China, in collaboration with Alibaba Group Holdings (NYSE:BABA), could stimulate iPhone sales growth in the region. This move is seen as a potential rebound strategy following a challenging period of declining sales in China, largely attributed to the absence of AI capabilities on iPhones in the region.
While the anticipated introduction of Apple Intelligence in China is expected to strengthen the case for a rebound in iPhone sales, Munster had previously stated that the 10% growth expectation for iPhone for next year could be too aspirational.
Meanwhile, analyst Wamsi Mohan from the Bank of America predicts that President Donald Trump‘s tariffs would lead to an increase in iPhone prices impacting Tim Cook-led company’s sales volume and earnings in 2026.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
