iPhone 17 faces dual pressure of tariffs and slowing growth, Jefferies Financial Group Inc. lowers Apple Inc.'s (AAPL.US) target price.

Jefferies Financial Group Inc. stated that due to the product mix and tariff issues of iPhone 17, Apple Inc.'s profit margin is at risk, while also pointing out that the momentum of the new iPhone is "continuing to cool." The organization lowered its target price for Apple Inc. stock from $205.16 to $203.07 and maintained its "underperform" rating. Analysts led by Edison Lee stated that Apple Inc. may not be able to completely avoid the impact of tariffs. The analysts added that not only could the current tariff exemption for smartphones be subject to change, but the market is underestimating the uncertainty risks posed by the US-India and US-China tariff frameworks. The analysts pointed out that US President Trump has imposed an additional 100% (now 30%) tariff on imports from China, and it is uncertain whether smartphones imported from China can continue to be exempt. Lee and his team stated: "Since Apple Inc. is unlikely to rely entirely on Indian production capacity to meet the 100% demand for iPhone 17 in the US market, we estimate that if a 130% tariff is imposed on some iPhone 17 exported from China to the US, it could affect Apple Inc.'s earnings per share by approximately 5% in the 2026 fiscal year. This estimate may be optimistic, as demand in the US market for other Apple Inc. products may also not be fully met by non-Chinese production capacities, not to mention the framework agreement imposing a 20% tariff on imports from Vietnam." The analysts added that the market may believe that given Apple Inc.'s commitment to invest $600 billion in the US, it will be exempt from tariffs no matter what, but if the US-China conflict escalates further, Apple Inc. may face greater pressure from the Trump administration to produce iPhones domestically in the US. The analysts pointed out: "This is unfavorable for profit margins." Lee and his team stated that the sales momentum of iPhone 17 is showing signs of further slowing down. They added that the entry-level model continues to be strong due to effective price reductions and more aggressive pricing in the Chinese market to take advantage of government subsidies. The analysts project that in the 2026 fiscal year, the entry-level model for iPhone 17 will account for 36% of the total sales of the 17 series, higher than the 32% share of the entry-level iPhone 16 in the 2025 fiscal year. iPhone 17 Market Dynamics In another report, Lee and his team stated that their latest tracking data shows that the delivery wait times for iPhone 17 Pro/Pro Max have mostly shortened in the six markets they track. The trend for the 17 Pro Max is most consistent, with all six markets having shortened wait times in the past two weeks, with the UK/Germany wait times now at zero. For the 17 Pro, aside from Japan, wait times have also been decreasing in the past few weeks, with wait times in the UK and Germany now at zero. The analysts added that the wait time for the base model 17 remains the best among the four models (17-22 days), although wait times in the US and UK have dropped to single-digit days. "Therefore, we believe that the base model 17 is still the strongest-selling model in the 17 series, and its sales mix will be more inclined towards the base model than last year. For the 17 Air, wait times remain zero in all six markets we track. Therefore, we believe that the 17 Air is the weakest among the four models, contrary to market expectations. However, if China approves eSIM in the next two months, it may provide some support for the 17 Air, but this may come at the expense of 17 Pro demand," Lee and his team stated. The analysts noted that their tracking also shows that, except for the 17 Pro Max in the Hong Kong market, the wait times for the 17 Pro and Pro Max are lower than the same period last year (compared to the 16 Pro/Pro Max last year). The wait time for the base model 17, however, is much higher than last year (wait times were zero in all six markets last year), indicating much stronger demand compared to the 16 base model. The analysts added that resale price trends are mixed, with a slight decrease in the resale price of the 17 Pro, while some models of the 17 Pro Max have seen an increase in resale price.