My initial read on the first hour of the Duo launch is that lines are surprisingly long given the high price point. My confidence in my estimate calling for 20m units in FY27 (7% of total iPhone units) inched up after this morning. The Street is looking for around 12m. That 8m incremental units should add about 3% to overall iPhone growth in FY27 (Street currently looking for 10%). The 3% upside comes from getting 8m people to switch from a $1.2k ASP phone to a $2.2k ASP phone, adding $8B to the Street’s FY27 iPhone revenue estimate of $279B. I expect iPhone to grow at 13% in FY27, vs. the Street at 10%.
Taking a step back, I’ve been visiting Apple stores on launch days for 18 years and have found the value of gaining insights on opening day has diminished as online orders have picked up and carriers have become more aggressive at facilitating upgrades. In other words, fewer people have been showing up on opening day, but that shorter lines over time have yielded strong cycles. Most notably, over the past year, when iPhone growth went from 0% in FY24 to 4% in FY25 to an expected 21% in FY26. That acceleration was despite the lower lines on opening day.
My handful of observations this morning showed lines for the Duo at about half of what we would’ve seen eight years ago when the iPhone XS and XS Max launched, the first new major form factors. Despite 2018 having two phones on launch day vs the single Duo, the 50% lower lines are also impacted by the price, 82% higher than that of the XS Max back in 2018. When factoring in the higher price, along with the shorter lines, I believe the reasonable takeaway is that the Duo is off to a solid start. It’s important to note that Wall Street expects this to be a niche product accounting for about 4% of iPhone units in FY27 and 7% of revenue. I’m more optimistic and expect Duo to account for 8% of units and 16% of revenue. Either way, the Duo will play a smaller role in the broader iPhone family in the following fiscal year. Looking out to FY28, I expect it will play a more significant role in the lineup.
The bottom line is Apple has discovered a new lever in the iPhone growth equation that should help boost overall revenue growth by 3% in FY27 and 5% in FY28. The Street is currently looking for 10% iPhone growth in FY27 and 8% in FY28. So I believe the Duo will slightly bump up those growth rates.