What has changed with the new products?

  • Apple has introduced its first touchscreen Mac: the 14-inch and 16-inch MacBook Pro models feature PROLED XDR displays and M5 Pro chips, with starting prices of 2899 and 3399 dollars, respectively. Pre-orders begin on 28 October, and the products go on sale on 6 November.
  • Other updates include the 14-inch MacBook Pro and 24-inch iMac with M6 chips, and the 8.5-inch iPad mini with an A20 Pro chip. Apple says the M6 MacBook Pro offers up to 30% better graphics performance and up to 25% faster AI workloads than the M5 model.
  • Goldman Sachs believes these products broaden Apple’s lineup for the 2026 holiday season and 2027, and could help encourage upgrades and increase market share over the long term.

How do higher prices help address the pressure?

  • The new 128GB Wi-Fi iPad mini starts at 699 dollars, compared with 499 dollars for the 2024 model with the same storage; the new 24-inch iMac starts at 1499 dollars, versus 1299 dollars for the 2024 model.
  • Goldman Sachs expects the new products and broader price increases across the product line to support revenue growth; a more premium sales mix could help offset the effects of near-term supply constraints and overall weakness in the PC and tablet markets.
  • Demand pressures remain: Goldman Sachs notes that a longer iPhone replacement cycle could weaken sales volumes, while consumer demand for PCs and tablets is also soft. The support to revenue from pricing and a premium product mix needs to be considered alongside these pressures.

Why is Goldman Sachs maintaining its Buy rating?

  • Goldman Sachs believes Apple’s expanding user base helps reduce customer churn and the cost of acquiring customers for new products. It can also drive repeat device purchases and service sales, making revenue more sustainable.
  • The bank expects services to account for most of Apple’s gross profit growth over the next five years, with user-base growth, service expansion and new product innovation together able to offset cyclical pressure on hardware revenue.
  • Goldman Sachs maintains its Buy rating and a 12-month price target of 390 dollars, based on a price-to-earnings multiple of 40 times its forecast earnings per share for the year following the next 12 months; the share price listed in the report is 347.10 dollars.