Apple Shares: Will the iPhone 17 Be a Game Changer for the Underperforming Magnificent 7?

Apple’s iPhone 17 Launch: A Critical Moment for the Tech Giant

Apple iPhone 17

Known as the Magnificent 7, Alphabet (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Meta Platforms (NASDAQ: META), Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), and Tesla (NASDAQ: TSLA) represent the most pivotal entities in the U.S. stock market.

These behemoths boast significant market capitalizations and command the technology sector.

However, as of 2025, Broadcom (NASDAQ: AVGO) has surpassed Tesla in market capitalization.

Collectively, these eight titans contribute approximately US$22 trillion to the S&P 500 (^GSPC), a widely recognized indicator of the U.S. stock market’s health.

Given their substantial influence, fluctuations in their share prices can disproportionately impact the overall market performance.

Historically, Apple has persistently ranked among the top three largest companies in the U.S. However, 2025 has revealed vulnerabilities within its façade.

Concerns surrounding decelerating iPhone replacement cycles, skepticism about its artificial intelligence monetization strategies, and the encumbrance of tariffs on Chinese imports have markedly affected its stock trajectory.

The company’s latest financial outcomes underscore this mounting pressure.

Net sales exhibited a modest 2% year-on-year increase to US$391.04 billion in the fiscal year concluding on September 28, 2024 (FY2024).

Notably, net income declined for a second consecutive year, dropping to US$93.74 billion from US$97 billion in FY2023 and US$100 billion in FY2022.

This underperformance is particularly stark when juxtaposed against its tech counterparts.

While Microsoft and Nvidia have witnessed robust growth through effective AI monetization, Apple has been hindered by its slow innovative pace and stringent privacy measures.

Consequently, Apple has faltered in both innovation momentum and stock performance compared to the Magnificent 7.

The September 19, 2025, launch of the iPhone 17 represents a crucial juncture for the company.

Initial consumer reception, especially for the iPhone 17 Pro models, has surpassed expectations, prompting suppliers to scale up production.

The pricing for the new lineup starts at US$799 for the standard 256GB iPhone 17 and US$1,099 for the 256GB iPhone 17 Pro.

In Singapore, the equivalent models are being offered at S$1,299 and S$1,749, respectively.

This suggests that Apple’s flagship products continue to enjoy considerable consumer allegiance.

Looking ahead, anticipation mounts for 2026 when Apple is set to introduce its inaugural “flip” iPhone.

If the “flip” model manages to harmonize innovation with premium design, it could serve as a catalyst for elevating share prices.

Despite global demand remaining strong, competition within the Mainland market intensifies.

Merely a week post-Apple’s launch, Xiaomi unveiled its Xiaomi 17 series, directly targeting the premium smartphone market.

According to Ivan Lam, senior analyst at Counterpoint Research, the Xiaomi 17 “has consistently invested in imaging systems to rival those of Apple.”

Compounding the challenge, Apple’s sales in Greater China have dwindled for the last three fiscal years.

Sales in Greater China have plummeted from US$74.2 billion in FY2022 to US$66.95 billion in FY2024, underscoring the critical need to protect its premium market presence.

The stakes for Apple to maintain dominance have never been more pronounced.

Performance by segments shows Apple’s substantial reliance on the iPhone, although it is increasingly bolstered by its Services segment.

The revenue from the iPhone has stabilized at around US$200 billion, lacking substantial growth.

Sales in Mac and iPad have weakened following the pandemic, reflecting a decline in consumer demand, while the wearables and accessories category has also seen a second consecutive year of decline.

Revenue from Services is approaching US$100 billion for FY2024, up from US$78.13 billion in FY2022.

This segment’s success is fueled by recurring income from subscriptions, including Apple Music, Apple TV+, and iCloud storage, positioning Services as a reliable growth engine against hardware volatility.

Despite the renewed vigor from the iPhone 17 launch, potential challenges loom on the horizon.

With Xiaomi firmly entrenched in the premium market, Apple’s ability to uphold its brand advantage in Greater China will be crucial.

In the future, the anticipated 2026 “flip” iPhone offers Apple a significant opportunity to rekindle consumer enthusiasm.

However, “Apple Intelligence” must evolve, showcasing capabilities beyond mere integration.

In 2025, Apple trailed behind the Magnificent 7, yet the positive reception of the iPhone 17 indicates the company has not lost its connection with consumers.

For investors, the crucial question is not merely whether Apple can continue selling premium devices but whether it can translate that loyalty into enduring earnings growth while narrowing the innovation and monetization divide with its tech counterparts.

Source link: Sg.finance.yahoo.com.